Following two days of painstaking discussions, Burma’s Union Parliament has passed bills amending the Income Tax Law and the Commercial Tax Law.

Lower house representative Win Oo said that the new laws will clean up Burma’s finances and encourage order in the federal tax system.

“By paying the tax, a citizen’s money will become as legitimate as declared money,” he said. “[It will be] ‘white money’, in street terms, which allows people to buy capital assets such as a house, land, apartment and car without paying additional tax.”

Tax for buying assets with undeclared money, known as “black money”, is set at three percent for property valued between one and 50 million kyat, 10 percent for 50 to 150 million, and 20 percent for 150 to 300 million. Tax is set at 30 percent for assets valued at 300 million kyat or higher.

“We aim to educate our citizens and clarify the tax system, and convince them to pay tax lawfully,” said Win Oo.

The new law also raises the minimum taxable yearly income to 2 million kyat (US$2,000), up from the previous 1.4 million (US$1,400).

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According to the amendment, those who make two to five million kyat annually must pay 5 percent income tax; 10 percent for income of five to 10 million; 15 percent for 10 to 20 million; and 20 percent for 20 to 30 million. Income above 30 million kyat will be taxed at 25 percent.

Another lower house member, Tin New Oo, said the bill also grants certain exemptions on earned income and offers tax relief for families.

Monday’s parliamentary session went on until 8pm — an unusually lengthy, even record debate time – before the house passed on Tuesday the amendments to the Income Tax Law and the Commercial Tax Law, changes that have been prioritised in advance of the 2014-15 fiscal year, which begins in April.

The Bill Amending the Commercial Tax Law issues a 50 percent tax rate for alcohol and drugs; 100 percent tax on cigarettes and tobacco products; 30 percent for precious gems; 15 for finished jewellery products; 25 for hardwood and sawn logs; 10 for petrol and diesel; and 8 percent for natural gas.

Han Tun, former Internal Revenue Department (IRD) official and now a financial columnist, said it would be hard to tell how successful the new legislation will be in terms of getting people to pay their taxes.

“The percentage of tax has been reduced, and the minimum eligible wage to pay tax has been raised – in a way the tax system is becoming fairer but I think there is still a lot of work to do,” he said.

“Inform the people about it so they are convinced they should pay tax, otherwise it will be hard to achieve.”

Last week the IRD released a list of over 10,000 companies in Burma that have evaded tax since 2012, vowing to take legal action without prompt disbursement of outstanding taxes.