Govt again proposes tax amnesty on undisclosed income

The government is again proposing to reduce the tax rates on undisclosed incomes so that more will be willing to pay the taxes owed on those incomes.

The proposal, which was part of the Union Tax Bill submission for the new 2019-20 fiscal year beginning October 1, was submitted to the Pyidaungsu Hluttaw on August 7 by Deputy Minister of Planning and Finance U Maung Maung Win.

He said the proposed tax reduction rate, or tax amnesty, will convince more to pay tax on their unassessed incomes.

“The tax revenue collected as a result can then be used to promote investment and consumption and push for more development in the current economic slowdown,” U Maung Maung Win said.

The proposed tax rate would be 3 percent for income up to K10 million, 5pc from K10 million to K30 million, 10pc from K30 million to K3 billion and 30pc for K3 billion and above. Currently, such sources of income are subject to income tax at rates ranging from 15pc to 30pc.

This is not the first time the government is pushing for tax amnesty to be included in the year’s Union Tax Law. Last year, a proposal for citizens with undisclosed sources of income on which tax was previously unpaid or underpaid to be subject to lower tax rates was rejected by Parliament.

According to the Joint Bill Committee as reported by Myanmar Times at the time, the amnesty was omitted due to issues relating to fairness. If approved, tax amnesty would essentially allow those who avoided paying tax in the past to pay lower taxes compared to those who had abided by the law. It would also permit them to escape punishment for tax evasion.

The government’s reasoning behind pushing for the amnesty is to provide an opportunity for taxpayers to pay up on taxes owed and bring large volumes of money back into the local economy. For example, sellers commonly understate the value of their land to avoid paying the full stamp duty of 7pc on the sale. By substantially reducing the rates, the government is betting that the taxes on the undeclared value of the land can be brought back into the economy.

It said that reliefs from this tax will only be allowed for expenditure in acquiring capital assets, establishing a new business and extending an existing business. No reliefs will be given to illegal possession of property or for matters related to the Anti-Money Laundering Law.

Gemstones have been excluded from the Union Tax Bill as they come under the Myanmar Gemstone Law 2019.

U Maung Maung Win said the new gemstone tax rate will be the same as the previous special commodities tax rate. Tax rates for special commodities such as cigarettes, alcohol and cigars, which have already been raised, will be inflation-based.

The 2019-20 Union Tax Bill has also increased the prize money for whistleblowers who provide information on those possessing special commodities without paying taxes.

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.