During the current government’s term, the number of taxpayers and tax revenue has increased, but the amount obtained reveals there is still some shortcoming in paying taxes according to taxable incomes, U Min Htut, director general of the IRD, told The Myanmar Times.

“If we look at the current situation, while more taxpayers are following instructions better than before, many others are still not complying by paying taxes according to their income. So, in order to increase the number of taxpayers, we are reviewing the taxable income brackets to make sure everyone plays their part,” U Min Htut said.

The IRD has set a target for collecting a total of K6.5 trillion in taxes this fiscal year. Revenues collected from commercial tax, income tax, lottery tax, stamp duties and the special commodities tax are expected to make up more than 80 percent of total tax revenues.

Of the various taxes payable in Myanmar, the increase in revenue so far came mainly from income tax and commercial tax.

Adjusting taxes

The Private Sector Development Committee, which consisted of Vice-President U Myint Swe, Planning and Finance Minister U Kyaw Win, and Yangon Region Chief Minister U Phyo Min Thein, held monthly meetings with entrepreneurs starting early this year. During these meetings, the entrepreneurs often brought up the topic of lowering the different types of taxes associated with doing business in Myanmar.

As a result, the Union Tax Law allowed the stamp duty on property sales to be lowered from 5pc to 4pc on May 31.

The law also exempted special commodity taxes on raw diamonds and emeralds on August 8. Under the new rules, the 10pc special commodity tax on diamonds and emeralds was removed and only 5pc of commercial tax was to be paid.

Also, commercial tax on trading of gold nuggets was exempted, and only 5pc commercial tax would be levied on the trading of other jewelry.

Backlash

To make up for the shortfall, the law also imposed a 5pc consumption tax, which includes taxes on mobile phone top-ups and income.

That has resulted in backlash from some citizens. “The public is not accustomed to paying consumption or income tax. These may be the taxes that are being paid by other countries but in Myanmar, we’re only just starting to do so. As such, raising income taxes has resulted in some unhappiness. As such, we have to educate and make [the citizens] aware that these are taxes that must be paid.” U Soe Thein, an economist, told The Myanmar Times earlier this year.

Source: https://www.mmtimes.com/news/taxable-income-still-lagging-despite-higher-number-taxpayers.html