Govt collects more tax than expected

The government collected more tax revenue than expected during the six-month interim period between April and September last year, U Maung Maung Win, deputy minister for the Ministry of Planning and Finance (MOPF) explained during a Union Hluttaw session on January 21.

A total of K3.4 trillion was collected compared to the K2.8 trillion projected by the MOPF, according to U Maung Maung Win.

The amount collected was K345.3 billion more than what was collected during the same period in 2017.

In Myanmar, eight ministries are involved in collecting taxes and other government fees. Of the 21 categories of tax, revenues collected from 15 categories exceeded expectations. These included commercial taxes, the Aung Bar Lay lottery tax, stamp duties, special commodities tax, income tax, custom duties, fisheries tax, vehicle license fees, driving licenses, business licenses and tax on oil and gas extraction.

The six tax categories that didn’t meet estimates are excise tax, mineral tax, tax for extractions from forests, tax on hydro-electronic power production, license for imports and water tax.

“Tax revenues were lower than expected because there were tax exemptions for certain products, and the tax on automobile licenses was also reduced,” U Maung Maung Win explained.

Meanwhile, taxes collected on hydro-electronic power production were less than estimated “because hydropower can only be generated depending on the weather conditions,” he said.

However, the tax to GDP ratio in Myanmar remains low at just over 7 percent. To reach the target of 10pc by 2020, more taxes need to be collected, U Maung Maung Win said.

Among its efforts to reform the tax system and facilitate tax payments, the government has switched from the official assessment system of paying taxes to the self-assessment system (SAS) based on recommendations from the International Monetary Fund and World Bank.

The aim of the SAS is to make it easier for and thereby encourage more taxpayers to pay tax. The Internal Revenue Department (IRD) expects tax collection from SAS taxpayers to be between 80 to 90pc of total tax income in 2020. Currently though, just over 3000 taxpayers have registered under the SAS.

According to the IRD’s report on the second phase of taxation reform, arrangements are being made to launch a tech-based tax management system soon. The plan is to adopt an integrated tax administration system under which people can register as tax payers and pay their taxes online via a web portal or mobile application.

Source: Myanmar Times

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