Finance Minister U Win Shein said the country has aimed to increase the tax to GDP ratio to 10 percent this year.
Myanmar has the lowest tax-to-GDP ratio in ASEAN, at 8pc in 2014-15, though it has improved markedly since 3.7pc three years ago.
The minister said he hopes foreign investment will grow and the tax base will widen with more businesses entering, which will increase revenue, he said.
“The main thing is we need a balance between income and spending,” he said late last week during a ceremony honouring the country’s largest taxpayers. “We also need to change the mind-set of taxpayers and employees, as it’s important to raise revenues.”
As previously reported, Kanbawza Bank was the largest taxpayer last year, paying K17 billion, while Myawaddy Trading was the largest commercial taxpayer with K10 billion, for the 2013-14 fiscal year.
The ministry also plans to open offices for mid-sized taxpayers soon, after achieving strong results from opening the Internal Revenue Department’s Large Taxpayer Office in April 2014, which coincided with a switch to self-assessments.
The state generated K4.3 trillion (US$4.18 billion) in tax income in 2014-15, about K300 billion over its target. It hopes to reach tax revenues of just less than K5 trillion for the current 2015-16 fiscal year.
Increased tax collection is important for the government to boost spending in areas like electricity distribution, supporting education rural development and providing drinking water, according to government officials.
Myanmar is also tackling a widening government budget deficit, which could be helped by increased tax revenue.
Tax could also decrease in certain areas, such as on imported petroleum, since the world price has declined, an official said.
Thura U Thaung Lwin, chair of the Tax Advisory Board, said there are nearly 320,000 taxpayers paying through township offices, and about 16,500 paying tax through the Company Circle Tax Office. He added most companies do not register with the Internal Revenue Department and still fail to pay taxes.
“We find local enterprises are still reluctant to pay tax regularly,” he said. “We tried to meet with taxpayers closely. We visit industrial zones and companies.”
Thura U Thaung Lwin added the latest Union Tax Law has reformed how income tax is conducted in some instances, as well as reducing the commercial tax rate on gems and jewellery and also providing tax exemptions for small businesses which generate income under K200 million.
Source: Myanmar Times