NAYPYIDAW — Lawmakers at the Union Parliament have pushed the government to reform the tax system, so as to plug shortfalls—in income, commercial, customs, telecoms, and oil and gas tax revenue—and allocate the tax burden more fairly.
There were calls from several lawmakers to initiate a more progressive tax system, both at an individual level—with significantly higher rates for higher earners—and at a geographic level—with poorer states and regions given tax breaks and allowances.
At a parliamentary session on Thursday, which included both houses, Lower House lawmaker Thet Thet Khine of Rangoon’s Dagon Township mentioned that Burma had the lowest tax base among Asean countries.
She suggested that the government “consider collecting more tax from higher income people” and enforce greater compliance.
Thet Thet Khine also encouraged the government to consider implementing different tax rates in different states and divisions of Burma, considering that some, such as Chin State, are considerably underdeveloped compared to others, such as Rangoon Division.
Upper House lawmaker Myat Nyar Na Soe said that, although the government had hit their overall tax collection target over the last fiscal year, ending in April, it was more important to increase tax revenue as a ratio of the country’s wealth.
He recommended a recalibration of commercial tax rates: products harmful to public health such as tobacco and alcohol should be taxed more—as well as “natural resource-based” products such as oil, gas, gems and jade—while “locally manufactured goods” should be taxed less with an eye to increasing exports.
Myat Nyar Na Soe added that taking the lead of other countries with more transparent tax systems, the government should clearly outline the rates for different taxpayers at least a year before any tax is due, and aim to keep these rates stable, allowing individuals and businesses to plan accordingly.
According to the government’s latest tax report, targets for income, commercial, customs, telecoms, and oil and gas tax revenue were not reached in the 2015-16 fiscal year. Lower House Lawmaker Khin San Hlaing, representing Pale Township in Sagaing Division, said the government should clearly explain why.
She added that the government should move away from a reliance on tax revenue derived from natural resource extraction and significantly expand the tax base, because these natural resources would be “gone one day.”
In recent years, as a means of encouraging tax compliance among the population, the Ministry of National Planning and Finance has been publishing instructions on paying tax in state-run newspapers, as well as lists of “top taxpayers.”
Maung Maung Win, deputy minister of National Planning and Finance, said in the parliamentary session that revenue targets for 11 tax categories had been reached during the 2015-16 fiscal year, while targets for seven other tax categories had been missed.
He said, “Although income tax revenue for the first six months was higher than in the last six months of last [fiscal] year, total income tax revenue fell below the target by a small amount”—netting 2.327 trillion kyats (US$1.97 billion) against a target of 2.335 billion kyats ($1.976 billion).
He attributed the failure to meet the income tax target to a tax exemption scheme on property sales approved in 2014—property tax being included in Burma under “income tax,” among six other categories.
Tax revenue from the oil and gas sector netted 259.2 billion kyats ($219 million) during the 2015-16 fiscal year, significantly less than the 495.3 billion kyats ($419 million) netted during the 2014-15 fiscal year. The dip was attributed to the dramatic global drop in oil prices as well as new regulations from the Myanmar Investment Commission.