Private Banks need to prove they are clean as only 12 out of 22 in the top taxpayers list

Of the 22 private banks in Myanmar, only 12 have been listed as top taxpayers, according to the Ministry of Finance and Revenue.

According to documents covering the 2011-2012 fiscal year, only 10 private banks are included on the official top 100 income taxpayers list. Only 12 private banks are included on the official top 500 taxpayers list released for 2012-2013 FY.

Private banks including Yoma Bank, owned by Serge Pun, dubbed as “Mr. Clean” by Channel News Asia; United Amara Bank (UAB), owned by Nay Aung, who is the son of Lower House MP Aung Thaung; Myawaddy Bank, and Innwa Bank were not included among either the top 100 income taxpayers list for 2011-2012 or the top 500 taxpayers list for 2012-2013.

Among the private banks that pay tax, Kanbawza Bank ranks first and Co-operative Bank (CB Bank) second, followed by First Private Bank and Industrial Development Bank.

Kanbawza Bank paid Ks 10.82 billion (US$ 10.82 million) in FY 2011-2012 and more than Ks 17 billion (US$17 million) in FY 2012-2013. The bank plans to pay more than Ks 22 billion (US$ 22 million) for FY 2013-2014 and has already paid Ks 16 billion (US$ 16 million) as pre-tax. CB Bank paid about Ks 3.2 billion (US$ 3.2 million) in FY 2011-2012 and more than Ks 2.5 billion (US$ 2.5 million) in FY 2012-2013. It has paid more than Ks 2.6 billion (US$ 2.6 million) as pre-tax for FY 2013-2014.

Among the list of older banks, Yangon City Bank, Myanmar Oriental Bank, Myanmar Citizens Bank, Treasure Bank (former Myanmar Livestock and Fisheries Bank), and Tun Foundation Bank have been paying tax regularly while other banks are not included in the list.

When comparing banks from the top taxpayers list, like Kanbawza Bank and the CB Bank, with those not included on the list, such as Myawaddy Bank and Innwa Bank, it is questionable why the latter banks are not on the list. First Private Bank, Myanmar Oriental Bank, Myanmar Citizens Bank, and Yangon City Bank can be regarded as smaller than Yoma Bank, but these banks have been paying millions of kyats in taxes every year. So, why Yoma Bank owned by the “Mr. Clean” Serge Pun is not included on the top taxpayers list remains to be seen.

Yoma Bank was established in 1993 and has opened over 40 branches in 25 major cities across the country. The bank should be investigated to determine whether or not the amount of tax it has paid is acceptable to the public and the international community. After the banking crisis arose in 2003 for various reasons, including money laundering, nine banks were forced to cease operations. During the fallout, some of Yoma’s banking operations were suspended.

Although Yoma Bank was only allowed to provide money wiring services, the public has entrusted the bank in doing money wiring. So it has been able to survive, even though it was only allowed to provide one service, according to sources from the bank industry.

Yoma Bank was allowed to resume all of its banking services at the end of 2012. However, it was not included on the top 100 income taxpayers list for FY 2011-2012 or on the top 500 taxpayers list for FY 2012-2013. Officials from Yoma Bank said they were unable to comment, as they were busy holding ceremonies, when Eleven Media called and asked for the exact amount of tax the bank has paid.

Even though Yoma Bank has not been included on the top taxpayers list, its owner Serge Pun has received licences to build FMI City on 465 acres of land and Pun Hlaing Golf Course on 650 acres of land in Hlaing Thayar Township and the Star City project on 135 acres of land in Thanlyin Township. Besides being allowed to operate on 1,250 acres of land in Yangon, 100,000 acres of land in Ayeyawady Region was given to Serge Pun, so called ‘Mr. Clean’.

Sources from business circles believe that most of the projects run by Serge Pun are from Singapore.

Under successive military regimes and the current quasi-civilian government, Serge Pun has been allowed to run more than 20 companies under his management for many Myanmar business sectors. These include Pan Hlaing Hospital, serviced apartments, motorcycle manufacturing and distribution businesses, communications and Yoma Bank.

Only two or three of Pun’s more than 20 businesses were listed on the official top 500 taxpayers list for FY 2012-13.

In addition, banks run by the military such as Innwa and Myawaddy should be able to prove that they are trustworthy for the public because they, too, were not included on the top taxpayers list for both 2011-12 and 2012-13 fiscal years.

In comparing the taxpaying records of four banks established in 2010 – Myanmar Apex, Ayeyarwady, Asia Green Development (AGD) and United Amara — Myanmar Apex and Ayeyarwady pay the most tax annually, according to statistics. They have paid more taxes than banks that were established before them and have been running for a long time in the business.

Myanmar Apex paid at least Ks 2.4 billion (US$ 2.4 million for 2012-13) and Ayeyarwady paid more than Ks 2 billion (US$2 million) in FY 2012-13. This means the two banks paid more tax than Tun Foundation Bank, which was established in 1994.

However, United Amara Bank (UMB) operated by IGE – a crony company that has enjoyed privilege under successive governments – was not included on the official Top 100 income taxpayers list for FY 2011-12 or the 2012-13 official top 500 taxpayers list. Eleven Media has contacted UMB to verify this year’s tax amount, but they have yet to disclose the amount.

According to records, Tay Za’s AGD Bank paid Ks 12 million (US$ 12,000) tax for FY 2011-12, and Ks 23 million (US$ 23,000) for 2012-13. The bank claimed that it has already pre-tax filed for this fiscal year, 2013-14, with the amount of Ks 0.3 billion (US$ 0.3 million).

AGD was ranked 365th on the list of top 500 taxpayers for 2012-13. However, the UAB did not appear on last year’s list, either. Experts say this would be because the UAB would have paid a lower tax amount or had not paid only tax at all.

Although the four banks began business at the same time with the same amount of capital, it seems that AGD and UAB have paid less tax amount than Myanmar Apex and Ayeyarwady. So it remains uncertain why only two of these banks have been paying tax but not the other two. They should also be scrutinized by the authorities in order to earn the public’s trust.

Does this mean there has been tax evasion or false tax filing? Or were banks being taxed differently or treated unfairly by the government?

It is time to check whether investment funds are “black” or “white,” because money laundering can be done easily in many business sectors of this country. Currently, 22 private banks are registered with capital of at least Ks 50 billion (US$ 50 million).

The important question here is whether these banks are trustworthy enough for the public. It would help to confirm where the invested money has come from. The public has the right to know if these banks are running with “white” or “black” money because the bank crisis in 2003 was due to money laundering. That caused public losses and much suffering.

The banks that are paying taxes to the government and being listed on the official top taxpayers’ lists are gaining the public’s trust and deserve to. People would also like to believe that the other banks are running with “white” money. Otherwise, people will decide the banks that are not listed under official top tax payers for many times are not trustable.

Source: ELEVEN Myanmar

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