Parliament Increases Power to Amend Tax Laws

By Nyein Nyein 11 March 2014

Burma’s Parliament on Monday passed the Union Taxation Law, which allows lawmakers to amend the government’s annual tax plans. A proposal by an opposition lawmaker to sharply increase duties on alcohol, tobacco and cigarettes was dropped from the new law.

Lower House MP Thein Nyunt said the Ministry of Finance drafted the 2014 Union Taxation Law two weeks ago and on Monday it was adopted by Parliament after numerous amendments were made to the original draft.

Thein Nyunt, of the opposition New National Democratic Party, said the new law would allow Parliament to make changes to government tax plans. He added that the new law for the first time allows MPs to make changes to annual union-level tax policies, while it also compels the government to inform lawmakers about the details of its annual tax laws.

A proposal to include a raise of commercial tax rates for cigarettes, tobacco and alcohol to 200 percent was dropped from the new law. The proposal had come from Khin San Hlaing, a Lower House lawmaker from Aung San Suu Kyi’s National League for Democracy (NLD).

Commercial tax rates will remain at 100 percent for cigarettes and 50 percent for both tobacco and alcohol.

Ba Shein, an Arakan National Party Lower House lawmaker and a member of the Bill Committee, said he had opposed the tax hike as comprehensive reforms of tax system were more important than the rates.

“What matters is that the [tax collection] civil servants actually need to do their jobs,” he said. “We want the taxation to be done correctly; this is the task of the government staff.”

International economists and international financial institutions, such as the World Bank, have repeatedly pointed out that Burma’s current tax system is in need of sweeping reforms.

Burma’s rich natural resources, such as jade, gems and timber, have mostly flowed out of the country unregulated and lightly taxed during past decades of military rule, generating little in the way of government revenues.