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Type: Ordinance
Responsible Agency: Ministry of Finance
Issuing Date: 2015-12-15
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Contents
Article 2 .Royalties of Natural Resources
Article 3.Principles for the Determination of Royalty Rates
Article 4.Scope of Application of this Ordinance
CHAPTER 2;Royalty Rates of Natural Resources
Article 5.Royalty Rates of Minerals
Article 6.Royalty Rates of Non-timber forest products
Article 7.Royalty Rates for Natural Water Resources
CHAPTER 3:Collection of Natural Resource Royalties
Article 8.Collection of Natural Resource Royalties
Article 9.Calculation Methods of Natural Resource royalties
Lao People’s Democratic Republic
Peace Independence Democracy Unity Prosperity
The President No. 001/P
Vientiane Capital, 15 December 2015
Ordinance of the President
of
the Lao People’s Democratic Republic
on
The Royalty Rates of Natural Resources
- Pursuant to item 2, Article 67, Chapter VI of the Constitution of the Lao People’s Democratic Republic;
- Pursuant to item 6, Article 52 of the Law on Environmental Protection No. 29/NA, dated 18 December 2012;
- Pursuant to the Request Letter of the National Assembly Standing Committee No. 016/SC, dated 07 August 2015 and No. 0381/ONA, dated 30 November 2015.
The President hereby issues an Ordinance:
General Provisions
This Presidential Ordinance defines the royalty rates of natural resources to ensure an accurate, uniform, and effective collection of royalties for natural resources countrywide with the aim of generating revenue for the state budget in accordance with laws and contributing to national socio-economic development.
Article 2.Royalties of Natural Resources
The royalties of natural resources refers to a financial obligation whereby local and foreign persons and legal entities licensed to operate businesses regarding natural resources are obliged to pay this to the state based upon the rate as stipulated herein.
Article 3.Principles for the Determination of Royalty Rates
The determination of royalty rates is to be implemented based on the following principles:
- The rate shall be based on production, economic growth rates, and the financial and economic policies of the government;
- To ensure sustainable development, natural resources must be used on a sparing and long-term basis;
- The same rate shall be applied countrywide.
Article 4.Scope of Application of this Ordinance
This Presidential Ordinance applies to domestic and foreign individuals and legal entities operating businesses regarding minerals, non-timber forest products, and water resources in the Lao PDR.
This Presidential Ordinance does not apply to plants and non-timber forest products derived from planting by business operators or citizens.
Royalty Rates of Natural Resources
Article 5.Royalty Rates of Minerals
a.Mineral Resources
Royalty rates of mineral resources are as follows:
|
No. |
Type of Mineral |
Rate (in percentage) of sale value of excavated minerals |
|
1 |
Gemstones and jadestone
|
10 |
|
2 |
Semi-precious gemstones
|
7 |
|
3 |
Precious metals
|
7 |
|
4 |
Basic metals (not steel)
|
6 |
|
5 |
Steel and steel-mixed metals
|
6 |
|
6 |
Rare and related metals
|
7 |
|
7 |
Everpohyde
|
4 |
|
2 |
|
|
8 |
Industrial minerals
|
4 |
|
9 |
Industrial soil/stone
|
4 |
|
10 |
Decorating stone
|
5 |
|
11 |
Coal
|
6 |
|
2 |
|
|
3 |
|
|
12 |
Natural oil and gas |
Based on agreement |
b. Mineral resources serving construction businesses
Royalty rates of mineral resources serving construction businesses are as follows:
|
No. |
Type of Minerals |
Rate (Kip) |
Unit |
|
1 |
Humus, laterite, clay |
3,000 |
Cubic meter |
|
2 |
Sand |
4,000 |
Cubic meter |
|
3 |
Mineral stone, rock |
5,000 |
Cubic meter |
|
4 |
Crag
|
7,000 |
Cubic meter |
Royalties for natural resources serving hydropower projects such as royalties on soil, rock, and sand excavated within the concession area of hydropower projects and used for such projects shall be calculated at the same rate as royalties of water resources serving hydropower projects as stipulated in Article 7 of this Presidential Ordinance. Royalties of other mineral resources not situated within a concession area but used in the hydropower projects shall comply with the rates stipulated in this Presidential Ordinance.
Article 6.Royalty Rates of Non-timber forest products
Royalty rates of non-timber forest products are as follows:
|
No. |
Type of Material |
Rate (in percentage) of sale value |
|
1 |
Natural growth trees with small bodies ranging from 20 cm or less used as decoration |
50 |
|
2 |
Pieces of eaglewood (agarwood) |
40 |
|
3 |
Pieces of sandalwood, red sandalwood, white sandalwood, etc. |
30 |
|
4 |
Rattan strips, small rattan strips |
30 |
|
5 |
Rattan palm, sugar palm |
30 |
|
6 |
Khaeua haem, khaeua taeng, khaeua tipti, khaeua khaohor, khaeua sakhan |
30 |
|
7 |
Charcoal |
20 |
|
8 |
Bamboo, mai louangpouk |
15 |
|
9 |
Golden shower tree seeds |
10 |
|
10 |
Kaueam gum, paek gum, mai daeng gum, mai dou gum, bong gum, mai khaen gum, oil gum, benzoin oil |
10 |
|
11 |
Mak chong, mak chong ban, mak tao, mak seang baeua, mak kham paep, mak naeng, mak kabao, mak kaeua, mak khonkhaen, mak khosom, mak taek, mak kaueam, mak khakai, mak wai, mak kha, mak kor, mak pongpeng, mak lae, mak samsip, mak ka |
10 |
|
12 |
Bong bark, maeuk bark, saied bark, porsa bark, hin bark, khae bark, hat bark, samhang bark |
10 |
|
13 |
Hua ya, hua dukdaeua, hua kapouk, hua koi, hua kha, hua samsip, yendon root, hua hanchay, hua samphanhou, hua man |
10 |
|
14 |
Dok phaeung |
30 |
|
15 |
Mai tiu, mai kor, firewood, construction wood, main wooden fencing |
10 |
|
16 |
All types of bamboo shoots and mushrooms |
10 |
|
17 |
Nam kieng |
5 |
|
18 |
All types of vegetable |
4 |
|
19 |
Dok kham, wild tea leaves |
4 |
|
20 |
Resin, sticklac, saltpeter |
4 |
|
21 |
Hill ginseng |
30 |
|
22 |
Hom sam maeung galangal |
50 |
For those non-timber forest products not included in the table above, in practice the royalty rates can be applied on a case-by-case basis; for example, for general natural resources they can be charged 10% of the sale value; for prohibited and endangered items they can be charged for 50% of the sale value.
The collection of royalty rates for non-timber forest products from natural resources shall be done during movement or exportation.
Article 7.Royalty Rates for Natural Water Resources
a. Natural water resources for hydropower projects
The royalty rates for natural water resources used in hydropower projects shall be charged as follows:
|
No. |
Types of the utilized natural water resources |
Rate (in percentage) of sale value |
|
1 |
Hydropower projects that export the electricity abroad |
More than 5 |
|
2 |
Hydropower projects that mainly supply electricity to the domestic market and with a production capacity of more than 15 megawatts |
|
|
3 |
Hydropower projects that mainly supply electricity to the domestic market and with a production capacity of less than or equivalent to 15 megawatts |
5 |
Apart from hydropower projects, if there is further development of other electricity production projects, the royalties for the natural resources shall be collected as set out in this Article.
The collection of the royalties for natural water resources as stated in the above table shall be based on the total income from selling the electricity before deducting any expenses, and the details of the royalties shall be stated in the concession contract.
b. Natural water resources for each production and service activity
The royalty rates for natural water resources for each production and service activity shall be collected as follows:
|
No. |
Types of the utilized natural water resources |
Rate (in percentage) of sale value |
|
1 |
Utilizing natural water resources in industrial production |
5 |
|
2 |
Utilizing natural water resources in mining activities |
10 |
|
3 |
Utilizing natural water resources in tourism and sports activities such as resorts, hotels, guesthouses, restaurants, and other sports recreation |
5 |
|
4 |
Utilizing natural water resources in the provision of water supply |
5 |
Collection of Natural Resource Royalties
Article 8.Collection of Natural Resource Royalties
The Finance Authority shall be responsible for the collection of natural resource royalties and other incomes, including fines relating to the natural resources as stated in the relevant laws and regulations.
Article 9.Calculation Methods of Natural Resource royalties
There are two methods of calculation for natural resource royalties as follows:
- The actual selling prices multiplied by the percentage for the types of natural resources that are sold.
- The quantity of natural resources extracted for selling or utilizing multiplied by the monetary rate as stated in this Presidential Ordinance.
Final Provisions
The Government of the Lao People’s Democratic Republic is to implement this Presidential Ordinance.
This Presidential Ordinance is effective from the date of promulgation by the President of the Lao PDR and after fifteen days posting on the Lao Official Gazette.
Benefits of the business operators in relation to the natural resources derived under the laws or agreements signed with the government prior to this Presidential Ordinance shall be implemented in compliance with such contract. If they wish to enjoy the benefits arising from this ordinance, they have the right to propose such to the relevant authorities and that the relevant authorities will notify them to comply with the laws and regulations.
Any regulations or provisions that contradict with this Presidential Ordinance shall be canceled.
The President of the Lao PDR
[Signature and seal]
Choummaly SAYASONE
Download English:Presidential Ordinance on Royalty Rate of Natural Resources No. 001/PO, dated 15 December 2015
Download Lao:Presidential Ordinance on Royalty Rate of Natural Resources No. 001/PO, dated 15 December 2015
List Measures Related to Legal Documents
| Name | Description | Status |
|---|---|---|
| Applicability of natural resources fees | Local and foreign individuals, legal entities who operate business related to minerals resources, non-timber forest products and water resources in the Lao PDR are subject to natural resource fees, pursuant to the table provided in the Executive Decree of the President of the Lao PDR on Natural Resources Fee Rate (No. 001/PR). | Active |