Myanmar has taken some new measures to tighten levying of taxes to raise state revenue, local media said.

A recent order of the Ministry of Finance and Revenue said foreigners working in the country are to pay 15 percent income tax in foreign exchange if earned in foreign currencies with effect from the current financial year of 2006-07 which began in April.

The order states that local nationals are also required to pay such income tax but 10 percent in foreign exchange if so earned.

The order also designates that foreign companies engaged in oil and gas projects in Myanmar are to pay 40 to 50 percent income tax in foreign exchange if derived from the sale, exchange and transfer of share, assets, ownership and benefit. The measure will be effective at a date back from June 15, 2000, the Weekly Eleven News reported Monday.

Besides, the tightened measures also apply to the economic enterprises run by Myanmar government, private and cooperative but with 10 percent fixed.

Myanmar has been stepping up levying of income tax since June this year.

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.

A recent government amendment to the old income tax law 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 -- 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.

Meanwhile, Myanmar will introduce a new measure soon aimed at preventing private companies doing business in the country from tax evasion.

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

30 percent of the profit will be taxed each year for companies and company responsible persons. They will have to undergo tax clearance check before they are allowed for exit.

According to the company tax revenue department, there are 10, 623 companies taxed by the government and they are mostly engaged in trade, services and production.

Income tax represents about 90 percent of the total government revenue.

Observers here said that levying of taxes in accordance with law is generally a normal practice but it is hard to assess how great the achievement could be made in the near future.

Source: Xinhua