Myanmar Doing Business

Paying Taxes

At a Glance : Paying Taxes

2020 Ranking: 129

2020 Distance to Frontier Score*: 63.9 (unchanged from DB2019)

Regional Average (East Asia Pacific): 73.6

More information on Myanmar’s performance in Paying Taxes -Click Here

* The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is reflected on a scale from 0 to 100, where 0 represents the lowest per-formance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. (Source; World Bank)

What it measures

Payments, time and total tax rate for a firm to com-ply with all tax regulations as well as post-filing pro-cesses

Why does it matter?

Taxes are the price we pay for a stable, more equitable society

  • Funding for social programs and public investments.
  • Key to building effective government.

But tax rates and burdensome tax administration remain top obstacle to business
Challenges:

  • To choose level of tax rates and tax base.
  • To design tax compliance system that encourages taxpayer participation

 

Paying Taxes in Myanmar

Tax or Mandatory Contribution Payment (Numbers) Time (Hours) Statutory Tax Rate Tax Base Total Tax and Contribu-tion Rate (% of Profit)
Corporate income tax 4 64 25% as of April 1, 2013 Taxable profits 26.28
Stamp duty on property transfer 1   4% Price of sale 2.42
Property tax 1   13% Land and building 1.75
Capital gains tax 1   Net profit 10% Capital gains 0.51
Employer paid social security contributions 12 111 2.5 % Gross salary 0.26
Commercial Tax 12 107 5 % Turnover 0.00
Employee paid social security contributions (jointly) 0 Jointly 1.5 %   0.00
TOTALS 31 282     31.2

 

Measure of Quality

  Answer Score assigned to Myanmar in the Do-ing Business2019 report
Post Filing Index (0-100)   45.5
VAT refunds    
Does VAT exist? Yes  
Does a VAT refund process exist per the case study? No  
Restrictions on VAT refund process non  
Percentage of cases exposed to a VAT audit (%) Not applicable  
Is there a mandatory carry forward period? No  
Time to comply with VAT refund (hours) No VAT refund per case study scenario 0.0
Time to obtain a VAT refund (weeks) No VAT refund per case study scenario 0.0
Corporate Income Tax Audits    
Does corporate income tax exist? Yes  
Percentage of cases exposed to an income tax audit 0-24%  
Time to comply with a corporate income tax correction (hours) 10 84.4
Time to complete a corporate income tax correction (weeks) 0.7 97.8

 

What has improved

Taxpayers who has TIN Number can pay via i banking, e banking and m banking 
The amendment on Commercial tax regulation by Notification 56/2020 is enacted. (Cash Refund on Capital Purchase)
Implement the Integrated Tax Administration System
New Income Tax Law is drafted to submit Parliment.
Contract for a new IT system for social security payments signed in September 2018
Tender process of IT System for Social Security Board is submitted to the President Office in December 2018 

 

Action Plan

Action Item Timeline Status

Implement the Tax Administration Procedures Law to provide an unified legal basis for tax collection

Short Term It is needed to be issued the Interpretation Statements and Practice Statements with the new law, Tax Administration Law.
Introduce electronic filing for medium and large taxpayers

Medium term

Internal Revenue Department is based on manual system instead of practicing with the modern technology at Tax Administration and assessment. Internal Revenue Department is planning to buy ITAS(Integrated Tax Administration System) dealing with International competition Tender that will be more effective for the Taxpayers with administrated habit.

Introduce electronic payment for medium and large taxpayers

Medium term  Now, Internal Revenue Department is negotiating to use online payment with AGD Bank, MAB Bank, Yadana -Bon Bank and mobile wallets licensed from Central Bank.

Educate taxpayers and tax profession also on the tax system

Medium term

It is needed to cancel education strategies from the medium term of Action Plan because our IRD is continuously announcing these awareness programs to the taxpayers and public after issuing the changes of law and regulation.

Consider reviewing the mechanism of the commercial tax

Long term Commercial tax acts as a mix of sales tax and VAT. Developing Policy for Value Added Tax will be started in 2021. Before implementing VAT, a notification (56/2020) amended the regulation of Commercial Tax was issued as one of characteristic of VAT.
Consider introducing cash refunds for capital  purchase Long term To be able to refund in cash, a notification (56/2020) amended the regulation of Commercial Tax on Capital Purchase was issued.
Introduce electronic payment for social security contributions Long term IT consultant from ILO assists Social Security Board to Launch an information technology system within next 3 years.

Launch an information system that will allow for electronic filing social security contributions

Long term ILO is supporting the Social Security Board to develop a new system for electronic filing. This year, the budget was obtained for the IT system. The pilot project will start in early 2020. About 30,000 companies file and pay social security contribution for 1,400,000 employees in Myanmar.

Review the Social Security Law of 2012 to identify areas for simplification and improvement

Long term

Social Security Board implementedstreamlined processes under the Employment Injury Insurance Pilot Project (including registration of employer and employee) in Hlaing Thar Yar and PyiGyiTakhon Township offices from June 2018 to November 2019. Inaddition, Social Security Board is going to extend the streamlined processes in 2021-2021 fiscal year for another (22) township offices.

The processes of claiming cash benefit for Health and Social Care Insurance as pilot project in Hlaing Thar Yar and PyiGyiTakhon Township offices will be simplified in 2020-2021.

According to theresult from pilot project, the streamlined processes will be considered in reviewing law.

 

Lead Person

U Min Htut,

The Paying Taxes Indicator Support Group is headed by the Director General of the Internal Revenue Department (IRD)

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