‘Top-Up’ Tax on Mobile Phone Use Returns to Parliament

By Moe Myint 16 December 2015

RANGOON — With just a few months of the current government’s term remaining, the administration of President Thein Sein is renewing its push to enact a tax on mobile phone use that proved highly unpopular when it was first put forward earlier this year.

Lawmakers in May voted to postpone consideration of the new levy, which prompted backlash from a public that for years paid staggering sums on the black market for a SIM card due their limited release by Myanmar Posts and Telecommunications (MPT). The state-owned firm until last year had a monopoly on Burma’s mobile network.

The proposed tax would see cell phone users pay 5 percent on top of the calling and data rates that telecommunications providers charge subscribers through prepaid cards, a so-called “top-up” tax. Prepaid top-up cards are used to add credit to mobile devices in order to make phone calls, send text messages and use the Internet.

Speaking to Parliament on Tuesday as he brought the bill up for discussion once more, Finance Minister Win Shein said Burma could earn 80 billion kyats (US$61.5 million) in the upcoming 2016-17 fiscal year if a commercial tax on telecommunications usage was successfully enacted.

If approved, the tax would take effect on April 1, 2016, right around the time that the National League for Democracy (NLD) government takes power.

A sitting NLD lawmaker, Phyo Men Thein, said he supported the idea of a tax on mobile phone usage and considered 5 percent to be a reasonable rate, noting that telecommunications taxes were a standard revenue stream for governments globally.

The legislator added, however, that there were several other ways to collect much more revenue, among them a property tax on large immoveable assets such as homes.

“Taxation should not only be a way to earn money for the country, it should bring stability to the housing market and balance to other sectors,” he said.

Aung Shein Bwa, an economic analyst also known for his contributions to local weekly and daily newspapers, said the 5 percent levy would not be too heavy a burden for consumers, while also proposing that lawmakers raise the threshold on earnings for which income tax applies. Currently individuals making more than 2 million kyats annually are required to pay income tax, a bar that he said should be raised to 5 million kyats.

“Commodity prices are inflating year by year and income tax [at the current threshold] will directly hit the people who have lower incomes,” he told The Irrawaddy.