Parliament Delays ‘Top Up’ Tax on Mobile Phone Use

By San Yamin Aung 28 May 2015

RANGOON — Burma’s Union Parliament on Wednesday agreed to postpone the enactment of a 5 percent levy on all cellphone usage until the end of the 2015-16 fiscal year.

Parliamentarians were acting on the urgent proposal of Lower House lawmaker Thein Tun Oo from the ruling Union Solidarity and Development Party (USDP), which was submitted to the legislature on May 21 and sought to delay the tax until at least the end of the fiscal year on March 31, 2016. The tax had been set to go into effect on June 1 of this year.

Lawmaker Soe Thein from Kalaywa constituency told Parliament that he agreed with the proposal to delay the tax pending further consideration, according to the state-run Myanma Alinn daily.

The government announced on May 18 that subscribers of Burma’s three telecommunications providers—state-owned Myanmar Posts and Telecommunications (MPT), Ooredoo and Telenor—would need to pay a commercial tax of 5 percent on all mobile “top-up” cards starting from June 1. The cards are used to add credit to mobile devices in order to make phone calls, send text messages and use the Internet.

The announcement sparked backlash among a public that for years had to pay exorbitant sums for a SIM card due their limited release by MPT, which until last year had a monopoly on Burma’s mobile network. The small supply spawned a black market trade that has only fully disappeared in the last few months as Ooredoo and Telenor have established their networks and injected competition into the country’s telecommunications industry.

Myanma Alinn reported that Union Minister for Finance and Revenue Win Shein defended the tax before Parliament on Wednesday, telling lawmakers that it was a modest levy relative to other countries, where a tax of up to 20 percent is applied to cellphone use. Neighboring nations Thailand and Malaysia collect a tax of 7 percent and 6 percent, respectively, he added.

The minister said that a survey by the Ministry of Communications and Information Technology found that mobile phone subscribers in Burma use an average of 5,000 kyats (US$4.50) per month, and that based on the 28 million SIM cards sold in the country, the estimated commercial tax revenue was 84 billion kyats annually.

Speaking to The Irrawaddy on May 21, Thein Tun Oo said he was not opposed to implementing the tax at a later date.

“I think it is OK to collect after some time, when the country’s economy develops. But now … we must consider whether we should collect the tax from the pockets of low-income people or from the rich people,” he said last week.

As news spread of the tax’s postponement, social media users offered both praise and criticism for the USDP lawmaker, with some saying he had acted in the interests of the public, while others accused him of making a political play on behalf of the ruling party ahead of elections due late this year.

Thein Tun Oo’s proposal to delay the tax was passed by Parliament without objection.