country report (myanmar) presented by kyaw ye' tun assistant director internal revenue...

Country report (Myanmar)

Presented by

Kyaw Ye' Tun

Assistant Director

Internal Revenue Department

Ministry of Finance and Revenue

Introduction

Situated in South East Asia

North & northeast - China

East & southeast - Laos & Thailand

South - the Andaman Sea

& the Bay of Bengal

West - Bangladesh & India

Introduction (Continued)

Total land area - 676,000(s) kilometers

From east to west - 936 kilometers

From north to south - 2051 kilometers

In the tropical monsoon zone

Three seasons

- the hot season (March to May)

- the raining season (June to October)

- the cold season (November to February)

Total population - 59.13 million

Ethnic groups - 135

Predominant language - Myanmar

Main religion - Buddhism

Full freedom of worship for other religions

Rich in natural & human resources

Need capital & high technology in every field

Introduction (Continued)

Myanmar tax policy

Based on the following objectives:

- To raise resources to finance government

expenditure

- To attain a balance budget

- To check economic inflation

- To coordinate domestic consumption,

investments and savings

To reduce the wealth gaps between the rich

and the poor

To discourage the consumption of some

commodities

To achieve other desirable goals

To invite participation in terms of technical

know-how and investment from sources

inside the country and abroad

Myanmar tax policy (continued)

Taxes & duties administered by IRD

(kyat in billion)

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

State

revenue298.502 472.178 724.976 896.241

1063.585

1098.030

IRD tax

collection

265.186

88.84%

448.156

94.91%

676.774

93.35%

838.391

93.55%

987.925

92.88%

1037.364

94.47%

Taxes & duties administered by IRD (continued)

Composition of tax revenue from(2004-05)to(2009-10)

(kyat in billion)

Profit Tax

Tax on income Kind of tax for self-employed individuals Resident citizens not being salary or wage

earners Association of person not being companies Not cover by income tax law, subject to profit

tax law Minimum income liable to tax is K 10,000 Income from production of goods or transport

services the tax payable is 10% less

Income from production of cheroots 10% more

If income exceed K 300,000,

tax payable = 146703+50% of amount

exceeds K 300,000

Tax payable based on 50 income level

Capital gains – 10% flat

Prepare to repeal this profit tax law after

Constitution comes into operation

Profit Tax

Supplement by Income tax rules, regulations,

the state budget law and notification issue

from time to time State economic enterprises, salary earners,

firms, companies, association of person Total income from in and outside Myanmar Nonresident foreigner for the income

received in Myanmar Comprises corporate income tax, individual

income tax, capital gain tax and withholding tax

Income Tax Law (1974)

Depreciation Allowance

Building - 1.5% to 10%

Furniture and fitting - 5% to 10%

Machinery and plant - 5% to 10%

Machinery equipment - 2.5% to 20%

Waterway transport - 5% to 10%

Road transport vehicles - 12.5% to 20%

Miscellaneous - 10% to 20%

Deduction

The persons who are responsible for

salaries income: The Head of Government organization The owner of enterprise Association of persons, a member of

management The president or the secretary, for co-operative

society General manager or manager of a company

Withholding tax Resident Non-

Resident Foreigner

Foreigner(a) interest - 15%(b) royalist for use of license, trade marks patent rights 15%

20%(c) Gross income (Receipt) from contracting works done for state organizations development committees,

and Co-operatives societies 3% 3.5%

(d) Receipt from contracting work 2.5% 3%

Rate of the income tax

Resident Foreigner;

(i) A foreigner who resides in Myanmar for not

less than 183 days

(ii) A company formed wholly or partly with

foreign share holders

(iii) As association management and decision

making of its activities wholly in Myanmar

Non-Resident Foreigner; is not a resident

foreigner in Myanmar.

The income from salary: salary, wages,

annuity, pension, gratuity and fees, etc:

Profession: a doctor, a nurse, a lawyer, an

Engineer, an architect, a film artiste, etc:

The Capital Gain: profit realized from the

sale, exchange, or transfer of capital asset.

Capital asset: land, building vehicle and

any capital asset connected with the business.

Rate of the income tax

Resident Non-Resident

Foreigner Foreigner

(a) Salary 15% 35%

(b) Capital gains other than

oil and natural gas sector 10% 40%

(c) Income from other than

salary 30% 35%

Rate of the income tax

Avoidance of Double Taxation agreements

(a)United Kingdom

(b) Malaysia

(c) Singapore

(d) Vietnam

(e) Thailand

(f) Korea

(g) Bangladesh

(h) Indonesia

(i) India

Commercial Tax

A turnover tax, like VAT or sale tax.

(a) Goods produced within the state and sold

domestic and abroad,

(b) Goods imported from abroad,

(c) Services rendered within the state.

There is chargeable to pay tax only on 10

kinds of services rendered within Myanmar.

Commercial Tax

Schedule 1 list item of goods exempt from the

tax, 5% for Schedule 2 list items of goods, 10%

for Schedule 3, 20% for Schedule 4, 25% for

Schedule 5 and Schedule 6 represents specific

types of goods ranging from 30% to 200%.

Pay tax in foreign currency:

(i) any commodity (Schedules 1 to 6 of

Commercial Tax Law) rate of 8% (not

including export sale of CMP);

Commercial Tax

(ii) 9 kinds of services, the foreign currency

includes in the receipts, prescribed rates

according to the type of services.

(iii) In border trade, the goods are imported

from abroad, the commercial tax, will be

levied with the currency used in import

transaction.

15 types of taxes and duties under the 4 major

head namely -

(a) Taxes levied on production &

consumption

(b) Taxes levied on income and ownership

(c) Customs duties

(d) Taxes levied on the utility of state own

properties

Myanmar tax structure

Taxes levied on domestic production and public consumption Excise duty - General Administration

Department Commercial Tax - Internal Revenue

Department License fees on - Customs Department imported goods State Lottery - Internal Revenue

Department Taxes on transport - Road Transport

Department Sale proceeds of stamps - Internal Revenue

Department

Myanmar tax structure

Taxes levied on income and ownership

Income Tax - Internal Revenue

Department

Profit Tax - Internal Revenue

Department

Customs Duties

Customs duties - Customs Department

Myanmar tax structure

Taxes levied on utilization of State owned properties Taxes on land - General Administration

Department Water tax and - General Administration embankment tax Department Tax on extraction of - Forest Department forest products Tax on extraction of - General Administration mineral Department Tax on fisheries - Fishery Department Tax levied on rubber - Forest Department

Myanmar tax structure

Trying to introduce self-assessment system

Preparing establishment of integrated network

systems

To raise the rate of taxpayer’s compliance

Promote solidarity, mutual amity and mutual

assistance among the ASEAN Nations

Conclusion