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Trillions of Kip in Earnings Go Unreported by Govt Bodies

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Trillions of kip have been lost due to the continued violation of financial regulations by ministries, government agencies, and state enterprises.

These include losses due to tax discounts and exemptions on the import and export of goods, the illegal transfer of state property, and other financial transactions.

The losses were outlined in a report introduced on Friday by the President of the State Audit Organisation (SAO) Dr

Viengthong Siphandone at the National Assembly’s ongoing debate session.

The SAO has audited the financial records of 12 ministries and government agencies, 12 departments, 16 provinces and Vientiane, and three units under the National Treasury for the fiscal year 2014-15.

More than 2.4 trillion kip was found to have been lost due to tax exemptions, tax discounts, and exemptions and discounts on special levies on the import and export of fuel, vehicles and timber.

This sum accounted for 46.4 percent of total revenue by the customs sector and was thought to amount to as much as 5.8 trillion kip.

Tax exemptions were made for certain projects, enterprises, and individuals as authorised by the government, ministries, provinces, the capital, districts, and special economic zones.

In the taxation sector, audits also found that 98.2 billion kip earned from labour status improvement, 74 billion kip in service fees, and about 1.4 billion kip made from the sale of desirable vehicle registration numbers had not been passed on to the state budget.

In addition, more than 800 billion kip received in taxes, state property, government funds and from other deals amassed by ministries, provinces and the capital had not found its way to the Ministry of Finance in the form of state revenue as required under Article 6 of the Law on State Budget.

Instead, the money had been used to finance investment projects, kept in cash, deposited  in bank accounts, or given as loans to the private sector.

More than 317 billion kip was found to have been acquired from the transfer of state property to the capital. Of this amount, more than 276 billion kip was related to activities undertaken by the Ministry of Information, Culture and Tourism, 34.4 billion kip was related to deals made by the Ministry of Education and Sports, and 6.4 billion kip was related to transactions carried out by the Ministry of Finance.

“This money was not recorded as revenue in the  2014-15 fiscal year. Deals were not undertaken in compliance with the decree on bidding and procurement, while project implementation did not follow the assessment procedure as stipulated in the Law on State Investment,” the report stated.

The Ministry of Information, Culture and Tourism and the Ministry of Education and Sports were also involved in the transfer to individuals of 91 plots of land with a combined area of more than 37,000 sq. metres, in transactions that did not follow authorised procedures.

Six other ministries were found to have opened 159 bank  accounts that had balances amounting to 367.7 billion kip at the end of the 2014-15 fiscal year.

In its report, the SAO said these issues were awaiting resolution. Furthermore, the Central National Treasury could not provide records for 2.9 trillion kip it had released for the payment of discounted debts and the issuing of bonds.

The audit also found that the Ministry of Finance’s Budget Department had not coordinated with the National Treasury in summarising payments.

The audit also turned up more than 156 billion kip that had been earned from the sale of timber in six provinces, but was not recorded.

Some provinces had included the money earned from the authorised sale of timber, confiscated timber, and fines in provincial financial development reserves with the amount determined between them. This resulted in a loss of revenue from the sale of timber, violating the Law on State Budget.

More than 441 billion kip was found to have been earned from the sale of timber, fees charged to other airlines to use Lao air space, and the sale and transfer of state assets, which again had not been recorded.

The National Assembly approved a total revenue target of 26.1 trillion kip for the year 2014-15, of which 25.3 trillion kip was accrued.

In total, audits of 44 budgetary units found 814.4 billion kip in unrecorded revenue.

 

Source: Vientiane Times