Friday, 14 August 2020

Rangoon, Burma: A new measure to be introduced soon in Burma will prevent private companies doing business in the country from evading tax, a local weekly journal reported in this week's issue.   The biennial renewal of business licenses of companies will be granted only on full settlement of their profit tax levied on them annually, said the Kumudra journal.  Thirty percent of the profit will be taxed each year for companies, it said, adding that company’s responsible persons, who apply to leave Burma, will have to undergo tax clearance checks before they are allowed to go. Meanwhile, Burma is stepping up levying of income taxes on employees in the private sector and the move has begun since June. According to the Internal Revenue Department, for the past 18 years, the government had not taken a serious approach to tax collection from private companies and individuals. With the rate of tax collection remaining unchanged, income tax ranges from five to 30 percent on varying income levels for local currency earners, while that for foreign currency earners it is a flat 10 percent. Observers commented that tax evasion has reached a critical stage in Burma with the majority of the people seeking to evade paying taxes. As one of its measures, the government designated that people who are found to be evading taxes, will be banned from travelling abroad until the financial debts have been settled, according to the department. The department statistics show that the country gained Kyat 400 billion (about US $ 363 million) in revenue in the fiscal year 2005-06 which ended in March, a significant increase over the previous years but much lower than targeted. The department attributed the lower figures to tax evasion, blaming some companies and individuals of presenting false data about their income for taxation assessment as well as the government's ineffective measures in collecting tax from companies, service providers, restaurants, supermarkets or individuals for the last 18 years. However, the finance authorities held that the recent amendments to income and commercial tax laws would not affect the tax rate levied by the government but would ensure that tax collection policy will be more effective and widespread. Income tax represents about 90 percent of total government revenue.