|
Tax System in Burma (Myanmar)
Introduction
1. Most of the government’s administrative expenditure is mainly covered by tax income in every country. Therefore, the efficient financial system is crucial for every country especially in developing countries. As per macro-economic concern, fiscal and monetary policies are well applied to get efficient financial system. Therefore, taxation is major role of the government’s earning. On the other hand, the distinct feature of taxation is not only government’s earning but also the relation between government and citizens such as law enforcement, capacity of government, reputation, etc.
2. Over the last decade, the organizational structure of many revenue bodies in the world has been the subject of major reform aimed to improve the operational efficiency and effectiveness of tax administrations and enhancement of the services to taxpayers. A number of tax administrations in the world have established special systems to administer their large taxpayers.
3. In Myanmar, there are five major taxes in 15 kinds of tax, such as income tax, profit tax, commercial tax, stamp duties and state lottery which are administered by Internal Revenue Department (IRD), Ministry of Finance and Revenue.
4. Tax Structure; Fifteen different taxes and duties under the following four major heading are structured in Myanmar.
(a) Taxes levied on domestic production and public consumption
(b) Taxes levied on income and ownership
(c) Custom duties and
(d) Taxes levied on the utilization of State Owned Properties.
5. There are also fifteen kinds of taxes and duties, among them Internal Revenue Department (IRD) under Ministry of Finance and Revenue, administers five kinds; namely, Income tax, profit tax, commercial tax, stamp duties and state lottery tax. Those five kinds of taxes and duties administered by Internal Revenue Department are acting in accord with the respective Acts and laws as follow;
(a) Income Tax - The Income Tax Law (1974)
(b) Profit Tax - The profit Tax Law (1976)
(c) Commercial Tax - The commercial Tax Law (1990)
(d) Stamp Duties - The Myanmar Stamp Act (1935)
The Court Fees Act (1937)
(e) Lottery Tax - Directives Pertaining to State Lottery
6. The Internal Revenue Department is responsible for the full realization of revenues as enacted by the State Budget Law. Past statistical data and sources revealed that in every fiscal year, IRD’s revenue collection had contributed a major portion of the State Revenue Budget 70% to 93%.
Income Tax
7. Who is liable; Income tax is collected from the following persons and groups.
(a) State Economic Enterprises,
(b) Co-operative Enterprises,
(c) Foreigners working under special permission in State sponsored projects,
(d) Salary Income,
(e) Non-resident foreigners,
(f) The foreign income of non-resident citizens,
(g) Companies,
(h) Resident foreigners,
(i) Partnership or joint-ventures formed with a, b, c, e, f, g and h mentioned above.
8. Income subject to Tax; Taxable income consists of assessable income and salary from resident citizen, non-resident citizen, resident foreigner and non-resident foreigner. Taxable incomes for resident citizen are salary, gross income received from letting out properties, sale proceeds of export, state economic enterprises, and companies. Taxable incomes for non-resident citizen are also salaries, gross income received from letting out properties and gross income received from service rendered as an agent. Taxable incomes for resident foreigner are salary, gross income received from letting out properties, gross income received from service rendered as an agent, income received from manufacturing, business activity, any service, and capital gain. Taxable incomes owing to non-resident foreigner are salary, income received from other than salary, capital gain and withholding tax.
9. Capital Gain; The capital gain means any profit realized from the sale, exchange, or transfer of capital asset and the words capital asset means any land, building, vehicle and any capital asset connected with the business, share and bonds including instruments of similar kinds.
10. Capital gain in other name of type of income/receipt of taxpayers such as resident citizen, non-resident citizen, resident foreigner and non-resident foreigner are incomes or receipts by foreign currency from oil and natural gas sector and other than this sector. Capital gains are defined as gains other than oil and natural gas sector, and gains in oil and natural gas sector up to foreign currency 100 millions and above.
|
