Since there have been far too many fatalities and tragedies in our lovely nation, let’s take a moment to decelerate by talking about the tax system and some of its statistics. Warning: you may be astonished!
A good tax system should have the following five characteristics: administrative ease, justice, adequacy, simplicity, and transparency.
Let’s implement all of these in Myanmar. We have informed ourselves on current affairs by speaking with the Internal Revenue Department (IRD).
All the positive aspects are present?
When a tax system is considered fair, all taxpayers are treated consistently and equally. Both individuals and corporations would pay their fair share of taxes, and income should only be taxed once.
However, who defines fairness? Certain companies and people in states and areas not under the jurisdiction of the federal government wind up giving EAOs, rebels, or NNCP terrorist organizations some kind of protection money.
Major towns and cities still have restaurants that avoid paying five percent commercial tax by refusing to provide receipts or by charging more for the shop so that customers must stamp their receipts.
Because it is difficult to determine someone’s income or wealth with accuracy, the majority of taxes in Myanmar are not progressive in nature among the three siblings of regressive, proportional, and progressive taxes.
Currently, tax collections are also insufficient. For 14 of the last 15 years, our budget has been in deficit. The nation lacks the infrastructure necessary to provide even the most basic services.
One aspect of the tax system in Myanmar that is commendable is its simplicity. That might be the outcome of the financial system’s and the economy’s lack of progress.
For example, the majority of taxes imposed on transactions involving vehicles or homes are applied as a fixed percentage of the transaction value.
Additionally, the property’s official valuation is only established for taxation purposes. Furthermore absent is a centralized transaction register. For individuals who wish to complete a value report on any property here, there is not much hope.
The ability of taxpayers and individuals to find out how the money that was taken from them was used is referred to as transparency.
Taxpayers understanding deductions, credits, exemptions, etc. Based on the central government’s disclosure of spending and allocations, there has been a little drop in openness since 2021.
Transparency is also necessary on a grassroots level since its absence promotes corruption in all facets of the civil service.
The transfer of farmland ownership titles is a prime example. The lack of transparency and openness regarding the fee structure forced citizens to pay whatever the civil servants in these departments sought in order for them to do their government-paid duties.
Finally, the administrative convenience pertains to both taxpayers and collectors. The system itself shouldn’t be costly or complicated.
Currently, people, company owners, and companies have challenges because different government offices have varied registration procedures.
They must visit multiple departments, register at different locations, and so on. Another problem is the regular turnover of assessors and collectors, which forces the taxpayers to start the entire procedure over.
Here are some fascinating statistics
During the most recent fiscal year, the government prosecuted at least 884 cases of commercial tax evasion.
A total of K980 million in fines, based on the frequency of the offense, had been assessed. However, it still only made up 0.03 percent of the year’s total revenue from commercial taxes.
Just 4% of the 283 IRD branches nationwide are subject to the SAS (Self-Assessment System). However, offices under SAS were able to collect 80% of the taxes.
It appears that the story’s lesson is to put your trust in the taxpayer rather than the tax collectors. Additionally, the majority of nations have eliminated the Officer Assessment System (OAS).
To get information on taxes and get clarifications, there are numerous hotlines, branches, and email addresses.
However, the only way to express dissatisfaction with the judgment is to write a letter to the IRD director-general.
The startling conclusion from our investigations was that there hasn’t been a decline in tax receipts beyond 2021. Indeed, there was a decrease during the COVID-19 pandemic, but not thereafter. Maybe it was the SAS that saved us.
There aren’t enough legal frameworks, integration problems, or high-level initiatives in place to guarantee that every person and organization in Myanmar has a single, distinct ID number that can be used for ALL government agencies. There is still no unified registration mechanism in existence.
Finally, it is unlikely that Facebook will address the issue of its targeting of Myanmar consumers, taking all ad earnings from Myanmar-based companies, and not paying any income tax in Myanmar very soon. In the meantime, Myanmar keeps losing out on tax income from the leading social media network.
