Myanmar steps up levying taxes from private sector

Myanmar is stepping up levying of income taxes from employees in the private sector and the move has begun this month, the local Myanmar Times reported Monday.

For the past 18 years, the government had not taken a serious approach to tax collection from private companies and individuals, sources with the Internal Revenue Department was quoted as saying.

With the rate of tax collection remaining unchanged, income tax ranges from 5 to 30 percent varying on income level for local currency earners, while that for foreign currency earners a flat 10 percent, the sources said.

A recent government amendment to the old income tax law, which was introduced in 1974, also implied that all businesses are to be taxed.

Observers commented that tax evasion has reached a critical stage in Myanmar with the majority of the people seeking for evading taxes.

As one of its measures, the government designated that people who are found to be evading taxes, will be banned from traveling abroad until the financial debts have been settled, according to the department.

The department statistics show that the country gained 400 billion Kyats (about 363 million U.S. dollars) in revenue in the fiscal year of 2005-06 which ended in March, a significant increase over the previous years but much lower than targeted.

Collected through five categories of tax, namely, income tax, profit tax, commercial tax, the sale of stamps and the state lottery, the country's revenue obtained ranged from 104 billion Kyats to 265 billion Kyats in the previous three years.

The Department attributed the lower figures to tax evasion, blaming some companies and individuals for presenting false data about their income for taxation assessment as well as the government's ineffective measures in collecting tax from companies, service providers, restaurants, supermarkets or individuals for 18 years.

However, the finance authorities held that the recent amendments to income and commercial tax laws would not affect the tax rate levied by the government but would ensure that tax collection policy will be more effective and widespread.

The authorities called for efficient collection of tax to raise enough money for public infrastructure projects.

Income tax represents about 90 percent of total government revenue.

Source: Xinhua