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Ministry of Finance unveils new tax system

As reforms continue to expand in Burma, so will the country’s tax base.

The Ministry of Finance and Revenue introduced a new tax system on 1 April requiring returns from the public sector and private enterprises that earn a minimal of 120,000 Kyat per month.

The new system aims to collect revenue from high earners who will pay nominal returns, while reducing the burden on residents that make little.

Maw Than, former professor at the Rangoon University of Economics and the government’s financial advisor said: “Every business enterprises should pay tax equally – [previously] companies such as [Htoo Trading Company] didn’t have to pay tax at the amount they should but now they will have to.”

According to the new system, individuals and businesses, which earn between 1 and 500,000 Kyat, will pay one percent of their earnings toward tax. The tax rate will then be increased by 1 percent for every additional 500,000 kyat that is earned. Therefore, if an individual who makes more than 20 million kyat they would pay about 20 percent of their income back in taxes.

“The problem with Burma is that the government does not receive the taxes it’s supposed to get” says Maw Than.

But under the new system, the former professor says even U Paing, who owns the Union of Myanmar Economic Holdings, would also have to pay tax.

“Because we’re reducing taxes we believe that people who have not paid tax in the past might be willing to do so now. And for people who have been paying their taxes regularly will probably pay less than they have in the past,” said U Myat Maw, director general of the ministry’s Internal Revenue Department, during an interview with the Myanmar Times.

Business owners and government workers, who in the past have been paid little but were unfairly taxed, have welcomed the new system.


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