By Yazar (Development Studies)
Myanmar is one of the lowest levels of tax yield in the ASEAN region as well as a ballooning budget deficit.
Members of the parliament debated recently on the report of the parliamentary joint Public Accounts Committee on the tax collection target for the second six months of this fiscal year, urging the need for reforming taxes in order to foster the country’s current social and economic reforms.
According to MP Daw Thet Thet Khine, our country’s expenditures have exceeded tax collections annually.
During the debate, she suggested reformation of the taxation system in order to increase the effectiveness of tax collection while the country’s total tax revenues have made up less than 5 per cent of the gross domestic product. It is found that total tax revenue as percentage of the GDP in Viet Nam and Singapore is 14 per cent and in China, India and Thailand is 17 per cent respectively.
The lawmaker also urged the government to encourage the businesses and the citizens to take pride in paying their taxes.
In fact, taxation reform is critical for scaling up the country’s economic and social reforms, thereby contributing towards job creation and boosting the government’s performance in tax collection.
The discussion of the MP Daw Thet Thet Khine is important for Myanmar which is just walking on the path to democracy. In fact, tax collection is not intended to get money for the government’s expenditure but to implement the following objectives of State.
They are: to establish a fair and balanced monetary system which helps correct currency regulation and prevent inflation, to keep domestic consumption, investment and saving on balance, to assist for stability of prices of consumer products and to balance wealth in the country and to underpin the economic development.
The Internal Revenue Development is currently collecting income tax by the 1974 Income Tax Law, the commercial tax by the 1990 Commercial Tax Law, the Stamp tax by the 1899 Myanmar Stamp Act and the 1870 Court Fees Act, and the state lottery tax by the Directives Pertaining to State Lottery.
Tax receipts fell below the target in seven types of taxes which are among 19 types of taxes in Myanmar.
Highlighting the importance of income tax, commercial tax, custom duty and special commodity tax for the country, the secretary said there is a need to raise some types of taxes year after year while there will be a decrease in other tax rates.
This main theme of this opinion is how important of the income tax is for a country.
An income tax is a tax imposed on individuals or entities (taxpayers) that varies with the income or profits (taxable income) of the taxpayer.
The government needs to make the country’s taxation system effective and every taxpayer should take pride in paying tax to the country, considering they are contributing to the economy of the country.
It is found that the country set its target of more than K1335 billion in tax for the 2015-2016 fiscal year and earned more than K1327 billion in tax collection. At a time when the country is building itself to become a modern one, every taxpayer should contribute their payment to the country until the revenue from the tax exceeds the target by many folds.
It is easy to criticize the government over low budget allocation on education, health etc. However, a few people know how the budget comes from. To lower budget allocations, they just put accusing finger on the natural resouces.
Recently, the Internal Revenue Department honoured the top income taxpayers. Among them, it is encouraging to see the Kanbawza Bank Ltd who was again the top one this year, getting the top income taxpayer for four consecutive years.
This year, it paid the State more than K22 billion and ranked top in the list of income taxpayers.
The Internal Revenue Department appreciated the KBZ Bank Ltd for its contribution to the country by paying largest amount of income tax for the 2014-2015 fiscal year. KBZ Bank paid more than K6 billion in tax during the 2011-12 fiscal year, more than K10 billion during the 2012-2013 FY and more than K17 billion during the 2013-2014 FY.
KBZ also paid the State nearly 23 billion in prepaid tax for the 2015-206 FY and K28 billion for the 2016-207 FY and is currently paying more than K32 billion for the 2017-18 FY.
At the ceremony, U Nyo Myint, Senior Executive Director, also expressed, on behalf of the company ltd, his pride in paying the tax to the country, vowing to pay tax to the country dutifully every year.
It is the duties or responsibilities of a citizen to pay tax to the country. We all should take pride in paying taxes to the country in order to help the government to accomplish a series of objectives.
By Yazar (Development Studies)