Vientiane: The Ministry of Finance of the Lao People’s Democratic Republic (Lao PDR), in partnership with the Asian Development Bank (ADB), officially launched the Domestic Resource Mobilization Modernization (DRMM) Project in Vientiane on May 14. The project aims to modernize tax administration and improve the efficiency, transparency, and effectiveness of domestic revenue collection in Laos.
According to Lao News Agency, the project inception meeting was co-chaired by Mr. Soulivath Souvannachoumkham, Vice Minister of Finance, and Mr. Amr Qari, Officer-in-Charge of the ADB Lao Resident Mission. Over 90 representatives from the Ministry of Finance, Provincial Finance Departments, line ministries, the private sector, and development partners attended the event. In his opening remarks, Vice Minister Soulivath emphasized the initiative’s significance, noting its role in strengthening the fiscal capacity and economic resilience of the Lao PDR.
Backed by a USD 25 million loan and a USD 2 million grant from ADB,
the DRMM Project addresses the urgent need for fiscal consolidation and enhanced domestic resource mobilization to reduce reliance on external debt. The Lao PDR has experienced steady economic growth, averaging 6.2% annually since 2010, but its tax-to-GDP ratio remains low at 11.1% in 2022, one of the lowest in the Asia-Pacific region. Mr. Qari of ADB highlighted the project’s importance in addressing these fiscal vulnerabilities.
The DRMM project will focus on digital transformation of taxpayer services, development of a modern e-invoicing system, enhanced data analytics capabilities, and the establishment of a tax training center to build institutional capacity. It is part of the 2024-2028 cooperation framework between Laos and ADB, as well as the 9th Socio-Economic Development Plan (2021-2025) and the Tax Strategy Development Plan (2021-2025). By improving revenue management mechanisms, the government aims to maximize domestic resource mobilization, reduce reliance on external loans, and strengthen macroe
conomic resilience.
This initiative marks a significant step toward a more efficient, transparent, and sustainable tax system, ensuring Laos’ long-term fiscal health. By the end of the project, tax revenue is expected to increase to at least 14% of GDP, with 75% of businesses registered with tax identification numbers. These achievements are anticipated to help reduce public debt and ensure more equitable and sustainable financing for public services.
The Ministry of Finance will lead the project’s implementation through a Project Steering Committee comprising senior representatives from key ministries and agencies. A Project Management Unit (PMU) and Project Implementation Unit (PIU) have been established, with the Tax Department overseeing core operations such as procurement, financial management, reporting, and coordination with stakeholders. ADB’s extensive experience in domestic resource mobilization reforms across Asia will be instrumental in ensuring the project reflects international best practices
adapted to the Lao context.
