RANGOON — Burma’s government announced on Monday that millions of cellphone users in the country will need to pay a 5 percent tax on all mobile top-ups starting from June 1.
The announcement brought online criticism soon after it was made at the Ministry of Communications and Information Technology in Naypyidaw and posted on the official Facebook pages and websites of Burma’s telecommunications operators.
One Facebook user shared the news with an accompanying comment calling the new levy “a disgrace.”
“As per Union tax law, all top-up amounts will pay commercial tax of 5% starting from 1st June, 2015,” Myanmar Posts and Telecommunications (MPT) told its customers in a text message.
The Communications Ministry said in its press release on Monday that the new tax provision was contained in an amendment to the Commercial Tax Law, which was passed by the Union Parliament on April 1.
The 5 percent levy will apply to subscribers of Burma’s three telecommunication providers: state-owned MPT, Ooredoo and Telenor.
Ooredoo said in a message to its subscribers that it would not change the amount it charges for a given top-up card, and would instead provide less credit, meaning the purchase of a 1,000 kyats (US$0.90) top-up card would give the subscriber 952 kyats in phone credit.
Moe Thway from Generation Wave suggested on his Facebook that the tax should instead be applied to current call rates.
“If we buy a 10,000 kyats top-up card, everyone wants to use a full 10,000 kyats. But if we buy a 10,000 kyats top-up card and it says your main balance is 9,500 kyats, both the government and telecoms operators will get daily revulsion from users,” he posted.
Comparing it against other levies such as the country’s commercial tax on restaurants, Nay Phone Latt, executive director of the Myanmar ICT for Development Organization, criticized the tax’s “unavoidable” reach.
“We can avoid the commercial tax at restaurants. We can choose not to buy food at restaurants and cook at home. But this, we can’t avoid. We are all using phones. So it will be a heavy burden for the public,” said Nay Phone Latt, an ex-political prisoner who rose to prominence as a dissident blogger under Burma’s former military regime.
“It is inconvenient to be charged 5 percent whenever we top up. I would like the government to consider another way, but now it seems they are tyrannizing people,” he said.
Aung Ko Ko, economist and writer, told The Irrawaddy that revenues generated by the tax could further the country’s development, but only if allocated prudently.
“If this money will go toward the country’s development, people are happy to pay. If not, even I will cut my phone top-up expenses after June,” he said.
Than Htun Aung, director of the Communications Ministry’s Posts and Telecommunications Department, said at a press conference in Naypyidaw on Monday that revenue collected from the new tax would be used “for the people.”
“We will use these collected taxes for the country’s in-need sectors, such as health care, education and road transportation for the people,” he said.
Mobile penetration in Burma has skyrocketed since the foreign firms Ooredoo and Telenor rolled out their networks last year, breaking an MPT monopoly on the market that had put the price of a SIM card out of reach for most people in impoverished Burma. Though still a regional laggard, Reuters reported on May 6 that the three telecommunications providers had tallied 18.1 million active subscribers, in a country of 51 million people.
Additional reporting by May Soe San in Naypyidaw.