fbpx

Union Tax Law approved without tax amnesty clause

Parliament yesterday approved the Union Tax Law for 2018 after omitting a tax amnesty clause proposed by the government.

The proposal was rejected after five meetings among MPs, government officials and businessmen. Instead, a separate law on tax amnesty will be drafted.

The government had originally proposed that resident citizens and non-resident citizens with undisclosed sources of income on which tax was previously unpaid or underpaid, would be subject to income tax at substantially reduced rates.

If the clause had been approved, they could have been subject to income tax at a rate of just 3 percent if the undisclosed income is declared within six months from April 1, and at a rate of 5pc if it is declared during the next six months of the fiscal year.

Currently, undisclosed sources of income are subject to income tax at rates ranging from 15pc to 30pc.

The reasons provided for rejecting the tax amnesty clause include the need for better public education on tax amnesty and the lack of punishment for those who declared undisclosed income after the tax amnesty period, the Joint Bill Committee stated.

According to the approved Union Tax Law, undisclosed sources of income will be subject to income tax at a maximum rate of 30pc.

If the citizen or resident can disclose the source of income used for buying, constructing or acquiring any capital assets, establishing a new business or expanding an existing business, the portion of income that can be sourced or proved shall be deducted from the total undisclosed income.

Subsequently, the balance of the undisclosed income will be taxed at progressive rates of 15pc for income up to K300 lakh, 20pc for income between K300 lakh and K1000 lakh and 30pc for income above K1,000 lakh.

“If a separate law is to be drafted for tax amnesty, we can discuss more. It needs to be a strong law. It may take more time to stipulate a new law,” Pyithu Hluttaw Bank and Monetary Affairs Committee Member MP Daw Khin San Hlaing said.

Other tax changes

In Myanmar, those with an annual income K 4.8 million or less are exempt from income tax. The Joint Bill Committee had earlier proposed that this be raised to K6 million. This has been rejected.

However, commercial taxes have been halved from 20pc to 10pc on vehicles including light vans, saloons, sedans, estate wagons and coupes with engine capacity of from 1501 cc up to 2,000 cc. “As these cars are the ones most people can afford, the tax rate has been reduced,” the committee said.

Commercial tax rates for all types of cigarettes are now between K4 and a maximum of K16 per cigarette for cigarette packs of 20 priced at K400- K801 and above, respectively.

For alcohol, commercial tax rates for all types of alcohol excluding beer will start at K 91 per liter to a maximum of 60pc of the value of the sales price per liter of alcohol. Taxes of up to 60pc will be levied on all kinds of beer.

As a whole, a total of K 2.8 trillion in tax revenues is expected under the newly approved law. This includes K863 billion from income taxes and K692 billion from commercial taxes. Other sources include customs duties, special commodities tax as well as taxes from the oil and gas and telecommunications sectors.

While the new fiscal year will begin from October 1, the tax year will remain unchanged from April 1 to March 31, 2019.

Source : Myanmar Times

To see the original article click link here

NB: The best way to find information on this website is to key in your search terms into the Search Box in the top right corner of this web page. E.g. of search terms would be “property research report”, ”condominium law”, “Puma Energy”, “MOGE”, “yangon new town”,”MECTEL”, “hydropower”, etc.

.

Looking for foreign investors to invest in your business in Myanmar