Restaurants Might Have Licenses Seized for Tax Non-Compliance

Restaurants which have failed to include commercial tax stamps might have their licenses seized, according to discussions among lawmakers at the Yangon regional parliament session on April 24.

Regional MP U Kyaw Kyaw Htun said that the regional government should deal with the restaurant situation. He suggested seizing licenses of restaurants which have failed to issue tax stamps three times, rather than pursuing legal actions, which is the method advised by the commercial tax law.

“Those restaurants are abusing the taxes paid by consumers to the government and it has been a huge loss for the country,” he said.

U Kyaw Kyaw Htun said there were 264 restaurants in the Yangon Region that failed to follow the tax directive during the fiscal year 2015-16 and they were fined K27 million, according to information from a local newspaper.

However, the figures released by Yangon Region Internal Revenue Department shows there were 262 restaurants which failed to comply with the tax directive properly during the 2015-16 fiscal year and those restaurants were fined K72 million. Up to October 2016, there were 122 restaurants which were fined K36 million.

The government introduced a system of stickers in Yangon Region in 2014 as a measure to make local restaurants pay commercial tax. A customer who pays the tax should receive a label posted on their receipt acknowledging payment. The labels, which come in a range of different denominations, are purchased from the Internal Revenue Department. However, authorities say that some restaurants are not providing the labels to customers or are providing a value less than what the customer should receive.

The government announced plans to name and shame those restaurants not paying their dues in October 2016.

Internal Revenue Department director general U Min Htut said that restaurants found not paying their 5 percent commercial tax would find their details posted on the tax department’s website.

U Aung Kyaw Tint, division head at Yangon Region’s Internal Revenue department, told The Myanmar Times in October 2016 that a recent investigation by his department found that about 35pc of restaurants were abusing the system.

“If restaurants have failed to follow the proper direction without any proper reason, they will be fined,” he said.
“The guilty are obvious.”

Restaurants which have failed to properly apply tax stamps have to pay a hefty sum – K200,000 for first offence, K500,000 for second, K700,000 for third and K1 million for fourth – said U Kyaw Kyaw Htun.

Region minister for finance and planning U Myint Thaung replied that there are 1508 restaurants which bought tax stamps from the Yangon Region Internal Revenue Department. That number has increased to 2265 in the 2016-17 fiscal year.

“The tax revenue collected up to K11 billion which means there is an average of K953 million per month,” he said.
According to the commercial tax law section 21(f), the internal revenue department has three mobile teams which have found 507 restaurants in violation in the fiscal year 2016-17 which then got fined up to K133 million, the minister said.

However, MP U Kyaw Kyaw Htun has asked parliament to seize licenses for an indefinite period of time. The 1990 commercial tax law section 23(e) mentions that if someone has failed to follow the law, he can be sued and sentenced up to seven years in prison.


Source: The Myanmar Times

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