Myanmar: Government under rising pressure to correctly tax ride-hailing companies

Since June 13, ride hailing companies operating in Yangon have been obliged to pay income and commercial tax to the Yangon government under the law, U Myint Thaung, regional minister of Planning and Finance said in parliament.

Three ride-hailing companies currently operate in Yangon: Singapore’s Grab, which entered Yangon last year, as well as local operators Oway Ride and Hello Cabs. A fourth operator, US-owned Uber, pulled out of the Myanmar market in April after Grab took over its local operations.

“We have already imposed taxes on the three companies for the 2016-17 fiscal year,” said U Myint Thaung. He added that the companies have also contributed a portion of their estimated tax payable for 2018-19.

The minister was responding to questions raised in parliament by MP Daw Mya Hla San, who pointed out that unlike traditional tax companies, ride-hailing companies take a percentage of the earnings of its drivers. “We need to be clear how much these companies earn and how these profits are taxed by the government,” she said.

Daw Mya Hla San added that Grab, for example, which takes a 15 percent cut from its drivers’ income, now takes a 20pc cut if the drivers joined after April 8. In addition, drivers are required to fork out K10,000 as a deposit.

“Grab is running with over 30,000 taxis. The government should closely monitor and review the earnings to impose the correct level of income and commercial taxes on these companies to maximise its tax revenues,” she said.

The government is under rising pressure to set the relevant rules required to regulate ride-hailing companies after promises to develop the legislation have gone unmet since last year.

‘’Regulations enabling fair competition in the taxi industry are needed. Otherwise, the bigger companies can easily push smaller operators out of business,”MP U Nay Bone Latt said last year.