Laos faces rising debt if, as expected, it fails to achieve its tax-revenue target for the fiscal year 2012-13 which ends this month, according to the Ministry of Finance.
Revenue collection over the past 11 months has fallen considerably short, with only 78.38 per cent of the 19.5-trillion-kip (about Bt77.2 billion) target collected. The ministry attributes the failure to unfavourable global economic conditions coupled with an overly optimistic target, set at 27.15 per cent higher than last year.
The ministry admitted that the revenue collected over the past 11 months was far below the target achieved last year, when the amount collected reached 92 per cent of the plan.
Over the past 11 months, the government spent 3.7 trillion kip to balance the budget deficit by using overseas loans and issuing short-term bonds to mobilise funding.
Despite the country’s economic growth of more than 8 per cent annually, Laos still faces challenges. It is seeking more funding to drive economic growth and poverty reduction efforts, with the goal of graduating from least developed country status in 2020.