Myanmar will introduce a new measure soon aimed at preventing private companies doing business in the country from tax evasion, a local weekly journal reported in this week's issue.

The biennial renewal of business licenses of companies will be granted only on full settlement of their profit tax levied on them annually, said the Kumudra journal.

30 percent of the profit will be taxed each year for companies, it said, adding that company responsible persons, who apply to leave Myanmar, will have to undergo tax clearance check before they are allowed for exit.

Meanwhile, Myanmar is stepping up levying of income taxes from employees in the private sector and the move has begun since June.

According to the Internal Revenue Department, for the past 18 years, the government had not taken a serious approach to tax collection from private companies and individuals. 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.

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.

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.

Income tax represents about 90 percent of total government revenue.

Source: Xinhua