A Study of Union Tax Law in Myanmar Zin Myo PGDL 203_17

CENTRE FOR HUMAN RESOURCE DEVELOPMENT
YANGON UNIVERSITY OF DISTANCE EDUCATION
DEPARTMENT OF LAW
A STUDY OF THE UNION TAX LAW IN MYANMAR
POST GRADUATE DIPLOMA IN LAW
PGDL-203/17
MG ZIN MYO
July, 2024
A Study of the Union Tax Law in Myanmar
Contents
Acknowledgement i
Abstract ii
Abbreviations iii
Introduction iv
Pages
Chapter 1 Taxation System in Myanmar 1
1.1 Nature of Tax 1
1.2 Types of Tax 2
1.2.1 Income Tax 2
1.2.2 Commercial Tax 5
1.2.3 Specific Goods Tax (2016) 6
1.2.4 Gemstones Tax 8
1.2.5 Stamp Duties 8
1.2.6 Property Tax 9
1.2.7 Penalty or Fine 9
Chapter 2 Rate of Taxes 11
2.1. Extend of The Union Tax Law 11
2.2 Pertinent Tax Laws 12
2.2.1. Tax Rate of Income Tax 13
2.2.2. Tax Rate of Commercial Tax 17
2.2.3. Tax Rate of Specific Goods Tax 18
2.2.4. Tax Rate of Gemstones Tax 19
2.3 Other Taxes Rate to be Collected 19
Chapter 3 Comparison of Investment Incentives between The Union Tax
Law and Investment Laws in Myanmar 22
3.1. Tax Benefit of the Investment 23
3.1.1 Tax Benefit under Myanmar Investment Law 23
3.1.2 Tax Benefit under Myanmar Special Economic Zone Law 26
3.1.3. Tax Benefit under Myanmar Foreign Investment Law 28
3.2. Investment Benefit under The Union Tax Law 29
3.3. Policy, Impacts and Restriction 30
Conclusion vi
References vii
Appendix ix
Schedules xviii
i
Acknowledgement
Initially, I would like to gratitude to Prof Dr. Daw Tin Htay Ei, Professor and
Head of Law Department, Yangon University of Distance Education for allowing me
to undertake this course, Post Graduate Diploma in Law.
I would like to appreciate and thanks to my supervisor, Dr. Nwe Nwe Htun, for
her valuable advices, suggestions, guidance and support during the whole period of
preparing this term paper and would like to thanks to all the professors and lectures of
Law Department for their precious time with sharing knowledge and experience.
Lastly, I would like to thank each and every one who take part during the
program.
ii
Abstract
This term paper studies Union Tax Law in Myanmar enacted by Pyidaungsu
Hluttaw 2024. One of the major features of this law is the introduction of a tax amnesty
for Myanmar citizens with un disclosed sources of income. The new law provides for
a reduced rate of tax based on the tax payer’s unassessed income. The tax rates can be
as low as 3%. The Union Taxation Law is an essential sector for a country to be
developed. Governments impose charges on their citizens and businesses as a means
of raising revenue, which is then used to meet their budgetary demands. This includes
financing government and public projects as well as making the business environment
in the country conducive for economic growth. Without taxes, governments would be
unable to meet the demands of their societies. Taxes are crucial because governments
collect this money and use it to finance social projects. Some of these projects includes:
Health, Education, Governance and other sectors such as infrastructure, transport,
housing and so on. This term paper will be focusing on the study of Union Taxation
Law in Myanmar 2024.
iii
Abbreviations
CGT Capital Gains Tax

CIF Cost, insurance and freight
CIT Corporate Income Tax
CT Commercial Tax
DTA Double Taxation Agreement
IRD Internal Revenue Department
ITL Income Tax Law
MIC Myanmar Investment Commission
PIT Personal Income Tax
PT Property Tax
SD Stamp Duty
SEZ Special Economic Zone
SGT Specific Goods Tax
UTL Union Tax Law
WHT Withholding Tax
DICA Directorate of Investment and Company Administration
iv
Introduction
The Union Tax Law (“UTL”) 2024 was enacted on 29 March 2024 by the Union
Parliament (the Pyidaungsu Hluttaw) and will be applicable for the Financial Year
(“FY”) 2024-2025 (1 April 2024 to 31 March 2025). With the new income year
commencing on 1 April 2024 and the Tax Administration Law (“TAL”) coming into
force, some of the more exciting changes under the UTL 2024 for taxpayers include
the tax amnesty provided on undisclosed sources of income and the exemption of
Specific Goods Tax (“SGT”) for petroleum products upon exportation.
There is room for improvement in Myanmar’s tax system. The Union faces
many challenges in both collecting tax revenue from both citizens and organizations,
as well as distributing this income to where it is needed. This affects the state’s ability
to govern effectively. Tax reform is needed to expand the tax base (increase the number
of different industries and individuals who are liable to pay tax). Modernizing an
outdated tax administration system is important to ensure equity for all citizens.
Improving public knowledge about taxation is needed to build trust in the process the
government is using to improve taxation in the country.
In Myanmar, the percentage of GDP sourced from government revenue is much
lower than the world average. For example, since the country transitioned to a quasi-
civilian government in 2010, when many international sanctions were lifted, tax
revenue as a percentage of GDP has not exceeded 10%. For instance, during the
2016/17 financial year, taxation revenue was only 6.4% of GDP. Of this revenue,
income tax payments made up approximately half, while commercial taxes were
responsible for 40%.
On 29 March 2024, the Union Parliament enacted the 2024 Union Tax Law
(“2024 UTL”). One of the major features of this law is the introduction of a tax amnesty
for Myanmar citizens with undisclosed sources of income. The new law provides for a
reduced rate of tax based on the taxpayer’s unassessed income. The tax rates can be as
low as 3%.
In addition, the 2024 UTL also provides for updated tax rates on certain specific
goods, introduces a gemstone tax for precious stones, and outlines changes to the
commercial tax and income tax. This new law is effective from 1 April 2024.
Chapter 1
Taxation System in Myanmar
Taxation is a system which is used by governments for the countries’ income
to spend it on finance social projects such as health, education, governance, defense
and so on. The system of taxation in Myanmar is supervised under Ministry of Finance.
The word “Tax” includes taxes, tariffs, payments, license fees, permit fees and fines
collected for the Union by the Union Government. Taxes are paid by every individual
citizen, who have income based on their earning as well as every business operated
within Myanmar.1
There is no VAT system in Myanmar. A commercial tax (Commercial Tax) is
imposed on a wide range of goods, imported into or produced in Myanmar, trading
sales, and services. The rates of Commercial Tax are set out in various schedules to the
Commercial Tax Law introduced on 31 March 1990.2
1.1 Nature of Tax

Many governments have to cope with less revenue, increasing expenditures and
resulting fiscal constraints, raising revenue remains the most important function of
1
Deloitte, International Tax, Myanmar Highlight 2019
2
Charltons Myanmar, Tax in Myanmar 2020
2
taxes, which serve as the primary means for financing public goods such as
maintenance of law and order and public infrastructure.3
Taxes are one of the sources which been argue between politician and countries.
In 1776, the anger of the American colonists over British taxes sparked the American
Revolution. More than two centuries later, the American political parties continue to
debate the proper size and shape of the tax system. Yet no one would deny that some
level of taxation is necessary. the income tax a settled and important part of the fiscal
system of the federal government and of an increasing number of states, the importance
of a thorough understanding of the various ramifications of this tax is clearly apparent.4
In Myanmar, the government is facing many challenges between citizens and
organizations for collecting of the tax but improvement of the taxation system of
Myanmar is improving as proved these days.
In Myanmar, the percentage of GDP sourced from government revenue is much
lower than the world average. For example, since the country transitioned to a quasi-
civilian government in 2010, when many international sanctions were lifted, tax
revenue as a percentage of GDP has not exceeded 10%. For instance, during the 2017/
2018 financial year, taxation revenue was only 6.4% of GDP 5. Of this revenue, income
tax payments made up approximately half, while commercial taxes were responsible
for 40% 6.
1.2 Types of Tax

There are types of tax mainly focus in the Union Tax Law of Myanmar. Which
are Income Tax, Commercial Tax, Specific Goods Tax, Gemstone Tax, Stamp Duties
and Property Tax7.
1.2.1 Income Tax

“Income Tax means the tax payable under the Income Tax Law, and includes
penalty imposed under the Income Tax Law” 8.
3
OECD, Addressing the Tax Challenges of Digital Economy 2016, 30
4
Robert C. Brown, "The Nature of Income Tax" (1933), 127
5
World Bank Group, Myanmar Public Expenditure Review 2018: Fiscal Space for Economic Growth
(Yangon: World Bank, 2018), 95
6
World Bank Group, Myanmar Public Expenditure Review 2018, 95,
7
www.ird.gov.mm
8
Section 3 of the Income Tax Law (1974).
3
The most obvious method to attack our problem is to consider each of the
above-mentioned accepted categories of taxes, and to ascertain whether the income tax
can be fitted into it. The first of these categories is the capitation or poll tax, which is
levied upon the taxpayer simply because he is a human being subject to the jurisdiction
of the taxing power. It is thus a personal tax in the strictest sense.9
Not only personal but also the corporate income taxes are comprised under
Income Tax, which are paid to Internal Revenue Department (IRD). Income Tax is one
of the largest revenue flows in for the government of the countries.
Although the tax base can be defined in a great variety of ways, corporate
income tax (CIT) generally relies on a broad tax base, formulated to encompass all
types of income derived by the corporation.10
Personal Income Tax (PIT) is the tax payable for each individual income.
Person earning less than MMK 2,000,000 per annum, the income tax was waived
according to the Union Tax Law 2024. The tax rate will growth from 5% to 25% who
are earning more11.
Corporate Income Tax (CIT) is eligible for the companies registered under the
Myanmar Companies Law 2017. A ‘non-resident’ company is a company not formed
under any of the above laws. Branch offices of foreign companies, which are not
registered under the Foreign Investment Law, are deemed to be ‘non-resident’. Non-
resident branch companies pay corporate tax at a rate of 35%. Companies owned by
the local citizens or resident are taxed on their worldwide income. Nevertheless, the
resident companies which been registered under the Foreign Investment Law are not
taxed for the income outside Myanmar12.
Effect to the income tax law are as follows: (a) Conditional amnesty, (b)
Cash rewards received as a result of the annexation of unlawful property and (c)
Powers granted to the Ministry of Planning and Finance (Ministry).
(i) Conditional amnesty
Tax amnesty is a limited-time opportunity for a specified group of
taxpayers to pay a defined amount, in exchange for forgiveness of a
9
Robert C. Brown, "The Nature of Income Tax" (1933), 128
10
OECD, Addressing the Tax Challenges of Digital Economy 2016, 32
11
VDB Loi, Myanmar Tax Booklet 2018, 7
12
VDB Loi, Myanmar Tax Booklet 2018, 2.
4
tax liability (including interest and penalties) relating to a previous

tax period or periods and without fear of criminal prosecution13.
The 2024 the Union Tax Law introduces an income tax amnesty for
citizens of Myanmar with undisclosed incomes or “income escaped from
assessment.” The tax is payable by citizens who cannot show the source
of their income that was used for buying, constructing, or obtaining any
assets, and establishing a new business. The IRD uses this measure to
ensure that the money used by its citizens for purchasing an immovable
property or material purchases came from a properly-declared source,
and such money has been properly subjected to tax.
Under the amnesty, if the taxpayer invests in purchasing capital assets,
construction, acquiring and establishing a new business, and business
expansion, such income may be deducted. The taxpayer will be subject
to tax on the remaining amount of unassessed income at lower rates14.
(ii) Cash rewards received as a result of the seizure of unlawful property
Previously, there was an income tax exemption threshold of K
10,000,000 per annum for cash rewards received once or several
times as a result of the seizure of unlawful property. Under the Union
Tax Law 2019, the income tax exemption threshold has been
removed. As such, the total amount of the cash rewards will be
exempted from income tax15.
(iii) Powers granted to the Ministry of Planning and Finance
Previously, the Ministry, with the consent of the Union Government,
may grant exemptions for income tax matters relating to Yangon
Stock Exchange listed public companies for the purpose of stock
exchange market development. The Union Tax Law 2019 amends the
powers granted to the Ministry to cover instead income tax matters
relating to market development of securities16.
13
Kathleen Pender, “The traps in amnesty for taxes”, 2005.
14
Section 25 of the Union Tax Law,2024
15
Section 28, Ibid
16
Section 31, Ibid
5
1.2.2 Commercial Tax

“Commercial Tax means the tax to be paid under the Commercial Tax Law.
This expression also includes a fine imposed under this Law” 17.
Commercial Tax is the second largest income tax for the government rated after the
Personal Income Tax. It is a 5% tax paid to the IRD on the sale of goods and services,
imports, and trade revenue. A number of goods are exempt from commercial tax. Most
of these are agricultural products, such as rice, beans and pulses, or palm oil 18. Certain
goods, such as cigarettes, alcohol, teak, and jade are also subject to an additional
Specific Goods Tax. These tax rates are set annually in line with Union Taxation
Laws19. Commercial tax is an example of indirect taxation.
Registration for commercial tax is required when the amount of income from
sales and services for an income year is MMK 10 million or more. There is no
commercial tax on the export of goods with very few exceptions. These include: -
(i) 5% – petroleum crude, (ii) 8% – natural gas, (iii) 30% – jade and other precious
stone and (iv) 50% – teak log and teak conversion; and hard wood log and hard
wood conversion (Such as teak, jade, precious stones, oil and natural gas). Services
are only subject to commercial tax if they are listed in schedule 7 to the Commercial
Tax Law.
The list of goods and services that are exempted from commercial tax
remains the same except for the following key changes: (a) there have been some
changes to the wording for the tea leaves category (which is exempted from
commercial tax), such that it now covers tea leaves (for eating), black tea leaves,
English tea leaves, and processed tea leaves; (b) yoghurt is now included in the list;
and (c) postal services provided by the Union Government are now included in the
list20.
Several goods and services have been added to the list of goods/services
exempted from commercial tax under the Union Tax Law 2019. They include: (i)
Goods: (a) Textbooks related to basic education, university and college under
school and office supplies; (b) Search and rescue vehicles under goods used for
religious or social purposes; (c) Raw materials for detergent and raw materials for
17
Section 3 of the Commercial Tax Law (1990).
18
VDB Loi, Myanmar Tax Booklet 2018, 25.
19
Special Goods Tax Law (2016), Article 6(a).
20
Section 14 of the Union Tax Law, 2024
6
soap and raw soap under industrial goods; (d) Gum karaya under industrial goods;
and (e) Medicines certified by livestock breeding and veterinary department under
industrial goods; and (ii) Services: Small-scale private electricity supply services
provided through electric power generation and transmission in the areas where
there is no access to national grid21.
Presently, commercial tax is imposed at the rate of 1% on income from the
sale of gold jewelry. The Union Tax Law 2024 elucidates that commercial tax paid
for purchasing gold jewelry within the country or importing gold jewelry may not
be set off against the commercial tax payable for selling or exporting the same.
Under Section 21 sub-section (f) of the Commercial Tax Law, if the
Township Internal Revenue Officer finds out that there is a failure to issue a receipt
or supporting document for cash receipt to the buyer or the service receiver or the
receipt is not affixed with the tax stamps equivalent to the amount of tax due under
Commercial Tax Rules, there shall be a 100% penalty of tax due on the receipt.
Under Section 39 of the Union Tax Law 2024, the following penalties shall be
imposed on each failure in cash in addition to the 100% penalty that shall be
imposed under Section 21 sub-section (f) of the Commercial Tax Law. (a) First time
failure – MMK 500,000 (b) Second time failure - MMK 1,000,000 (c) Third time
failure - MMK 1,500,000 (d) Failure after third time - MMK 2,000,000 Further, if
the Township Internal Revenue Officer finds out that any person is in possession of
the goods that are required to be affixed with the tax stamps, but for which tax is
not paid shall be imposed with a penalty equivalent to 100% of the value of the
goods.
1.2.3 Specific Goods Tax (2016)

Specific Goods Tax means the specific goods tax payable under this Law. This
expression also includes the fine under Specific Goods Tax Law22.
The total number of specific goods has been reduced from 17 to 14 specific
goods, as gems and jewelry have been excluded from the category. However, this does
not mean that such goods are now exempted from the tax. The UTL 2024 has
21
Dentons Rodyk, “Review on Myanmar Union Tax Law”, 2019.
22
Section 3 of Specific Goods Tax Law (2016).
7
introduced a new category of tax called a ‘Gemstones Tax,’ and all goods related to
gems and jewelry will fall under this category.23
Under the Union Tax Law 2019, the special commodity list remains the same
except for the following; (a) the tax rates for various kinds of cigarettes have increased
(b) the tax rates and value tiers for various kinds of liquor have changed, (c) impact on
natural gas and (d) impact on gemstones24.
(i) Cigarettes and cheroots
The tax rates for various kinds of cigarettes have increased (Appendix
III, Table 5). The tax rate for cheroots has been increased from K 0.50
to K 0.75 per stick. The tax rate for Virginia and cured Virginia tobacco
remains unchanged (i.e., 60%). Further, the tax rate for cigars, piped
tobacco, and betel quid preparations remains unchanged (i.e., 80%).
(ii) Alcoholic beverage
The tax rates and value tiers for various kinds of liquor have changed
and are now as follows: (Appendix IV, Table 6). The tax rate for various
kinds of wine with a price that ranges from K 16,501 to K 19,500 per
liter is now 50% of the 1 liter price (previously, it was K 3,900 per liter).
Wines with a price above K 19,500 per liter have been removed from
the special commodity list. The tax rate for various kinds of beer
remains unchanged (i.e., 60%).
(iii) Nature gas
Sales income generated from exporting natural gas is no longer subject
to special commodity tax. Previously, tax at the rate of 8% was
applicable.
(iv) Gemstones
Gemstones are now no longer subject to special commodity tax.
Previously, special commodity tax was levied at the rate of 15% on
uncut jades, 10% on other uncut gemstones (excluding diamonds and
emeralds), and 5% on polished gemstones and gemstones embedded in
jewelry (excluding diamonds and emeralds).
23
Ngwe Lin Myar Chit, Union Taw Law 2019, Everything you need to know about amnesty, Specific
Goods Tax Change, 2019, 1
24
8
1.2.4 Gemstones Tax

Government had released the Gemstones Tax Law. The 2016 licensing
moratorium and Gemstones tax mean the tax payable on gemstones; Uncut jades,
Rubies, sapphires, and other uncut gemstones (except for diamonds and emeralds),
Polished jades, rubies, sapphires, and other gemstones (except for diamonds and
emeralds). Also, polished jewelry in which jades, rubies, sapphires, and other valuable
gemstones under the Gemstones Tax Law (2019) 25.
As discussed above, gemstones are no longer subject to special commodity
tax. In addition, gemstones are no longer subject to a 5% commercial tax. Instead,
gemstones are now regulated under the Myanmar Gemstones Law which imposes
tax on uncut gemstones, polished gemstones, jewelry and items made with
gemstones in accordance with prescribed tax rates. Any gemstones tax collected is
to be transferred to the Internal Revenues Department's bank account.
Sales of gemstones will be assessed based on the actual sales price or the
sales price as determined by the Myanmar Gemstones Enterprise, whichever is
higher. Tax applicable to the import of gemstones will be assessed based on the
landed cost. The applicable tax rates are as follows: (Appendix V, Table 7)26.
1.2.5 Stamp Duties

Stamp duties are one of the oldest forms of taxation. stamp duties remain a part
of the tax system in most countries, but they are widely criticized and there are
continuous calls for their abolition. In most cases, they are retained primarily to protect
revenues.27
The Stamp Act, as amended on 1 April 2014, is the fundamental legislation in
respect of stamp duty (“SD”) obligations. The main purpose of levying SD is to give
legal effect to chargeable instruments. Chargeable instruments are documents that
create, transfer, extinguish or record rights or obligations. As a general rule, SD is
levied on all chargeable instruments, unless explicitly exempted. If the SD is not paid
at the time of execution of the instruments or within one month (in practice) of their
execution, the IRD will impose a penalty of 10 times the amount of the overdue SD.28
25
Section 2 of the Gemstone Tax Law (2019).
26
27
Roy Bahl, Property Transfer Tax and Stamp Duty, 2004, 34
28
Section 2 of the Myanmar Stamp Act (1899).
9
Stamp duty is a tax that a government imposes on certain legal documents and
which make the documents recorded legally such as marriages, copyright and so forth.
1.2.6 Property Tax

Property tax is administered in urban areas by Development Affairs
Organizations (DAOs)29.
Based on the estimated value of both residential and commercial properties.
While this tax is relatively small, making up only 0.03% of GDP in 201330.
It is noteworthy for urban citizens as it is paid twice per year to door-to-door
tax collectors31.
The effect of tax competition may be more obvious in developing countries than the
advanced economics. The study shows that tax administration reforms often go hand
with tax policy measures and sustainability of the tax reforms is also linked with key
compliance areas.
1.2.7 Penalty or Fine

The Union Tax Law 2024. reiterates that goods that are required to be affixed
with an SGT stamp (e.g. cigarettes, alcohol and wine) will be subject to penalties in the
event of failing to affix the required stamps, according to the relevant provisions under
the Specific Goods Tax Law32.
Since the CT Law does not state the penalty for CT stamps, the Union Tax Law
2019 states that the defaulter will be subject to the penalties listed below in addition to
100% of the additional payable tax as per voucher or payment receipt for failure to affix
the CT stamp on the voucher or payment receipt and failure to issue voucher or payment
receipts to customers. (a) First default will be subject to MMK 500,000, (b) Second
default will be subject to MMK1 million, (c) Third default will be subject to MMK1.5
million, and (d) Above third default will be subject to MMK 2 million33.
29
DAOs are replaced by city-specific counterparts in some cities. Examples include the Yangon City
Development Committee (YCDC) and the Mandalay City Development Committee (MCDC).
30
Donald McLaughlin and Arkar Hein, Managing the Challenges of Rapid Urbanisation: A Review of
the Existing Property Tax System in Myanmar (Yangon: Renaissance Institute, 2018), 3
31
James Owen and Hay Mahn Htun, Attitudes Toward Taxation in Myanmar: Insights from Urban
Citizens (Yangon: The Asia Foundation, 2018), 14
32
33
Section 39, Ibid
10
In addition, failure to affix CT stamps on goods (e.g., mobile handsets) that are
required to be affixed with CT stamps will be subject to 100% of the value of the goods
as penalty34.
The Union Tax Law 2024 mainly postulates advantageous tax rates and
exemptions for taxpayers, exceptionally with regard to tax amnesty on undisclosed
sources of income. Taxpayers should declare the undisclosed source of income within
financial year 2024-2025 to enjoy the reduced tax rates, as there is a time limit on the
tax amnesty.
34
http://www.vdb-loi.com/mlw/union-tax-law-2019-everything-you-need-to-know-about-amnesty-
exemptions-and-significant-changes.
Chapter 2
Rate of Taxes
Taxes are main source of revenue for the government to become the developed
country. Tax rates are the one main issue that the tax payers, both personal and
corporate, focus into. Nevertheless, it is also a sensitive concern for the revenue of a
country.
2.1 Extent of The Union Tax Law

The main key objectives of Union Taw Law is to present up with the rates of
each tax to be collected within the Union. Regarding the types of tax in this Law, the
Ministry concerned shall collect the revenue estimate for collection by tax rates of this
Law 35. There are four main types of tax stated in the Union Taw Law; (i) Income Tax,
(ii) Commercial Taw (iii) Specific Good Tax and (iv) Gemstones Tax.
On 29th March 2024, some of the tax rates described in the Union Taw Law
2024 been amended by (State Administration Council Law No.23/2024).36
35
Section 4 of The Union Tax Law, 2019
36
Lincoln Legal Services (Myanmar) Limited, “Review on Myanmar Union Tax Law”, 2024
12
2.2 Pertinent Tax Laws

The following major taxes and duties are administrated by IRD in accordance with the
respective act or law 37.
i. The Income Tax Law (1974)
Income tax are accord under The Income Tax Law (1974) and it cover
both personal income tax and corporate income tax.
ii. The Commercial Taw Law (1990)
The Commercial Taw is accord under The Commercial Tax Law
(1990). According to The Commercial Tax law, the commercial taxes are set to
the various rates based on the types of products.
iii. The Myanmar Stamp Act (1935) and The Court Fees Act (1937)
The Stamp Duty is basically created for the transfer and legalized of the
property and interests. The stamp duty is administrated by The Myanmar Stamp
Act (1935) and The Court Fees Act (1937) (which is as amended from time to
time)
iv. The Specific Goods Tax Law
The Specific Goods Tax Law replaces commercial tax on a list of
specific goods that are imported into Myanmar, manufactured in Myanmar, or
exported to a foreign country.
v. The Myanmar Gemstones Law (2019)
The Myanmar Gemstones Law was energetic from 1st October 2019 and
the taxation is covered on both gemstones and jewelry.
vi. Directives Pertaining to State Lottery
Up to 60 per cent of profits from tickets were given away as prizes and
the remaining been added to government reserves as Lottery Tax.
vii. Tax Administration Law (2019)
Tax Administration Law is aims to set out the administrative process. It
administrates the income tax, commercial tax, specific goods tax and other
types of tax been supervised by the Director General of the Internal Revenue
Department (IRD).
viii. Union Taw Law (2019)
37
www.ird.gov.mm
13
Pyidaungsu Hluttaw; the Union Parliament endorsed the Union Tax

Law annually before the financial year started and it specified the tax rate, the
requirements related to year, income year or the year in which sales proceeds
or revenues from service arise contained in Specific Goods Tax Law,
Commercial Tax Law and Income Tax Law.
As said by Chapter III of the Union Tax Law 2019, the relevant Ministry
concerned shall collect the revenue estimate for collection by tax rates of this
Law. The Union Government shall, if desirous to amend, add or substitute the
tax rates of this Law, submit to the Pyidaungsu Hluttaw for empowering to
discuss and decide38.
2.2.1 Tax Rate for Income Tax

Personal income tax is applied to people acquiring compensation or income in
Myanmar as a Myanmar resident or occupant or enlisted outsider. All Myanmar
residents are treated as tax inhabitants of the nation and are taxed by their pay or wages.
Additionally, an inhabitant outsider in Myanmar is exposed to income taxes from all
pay rates, wages or benefits got from any sources inside or outside Myanmar.
A non-inhabitant outsider who gains a wellspring of salary in Myanmar is
likewise exposed to taxes equal to an occupant outsider in the nation. As per the law,
an outsider who lives in Myanmar for at any rate 183 days during the salary year is
treated as an occupant in Myanmar. Nonetheless, the residents of Myanmar working
outside the nation are absolved from tax, yet different wellsprings of salary are taxable.
Moreover, there is a finance tax and social security tax which the business needs to pay
to the administration for the benefit of the representative for offering worker
advantages and social insurance coverage39.
Corporate taxes are applied to organizations incorporated under the Myanmar
Companies Act and worldwide associations that have gotten unique authorization to be
occupied with state-supported activities, endeavors or endeavors. The corporate tax is
applied to the companies at the rate of twenty-five per cent out of the profit which is
calculated excluding all the business operation expenses 40.
38
Section 5 of The Union Tax Law, (2019).
39
Business Setup Organization, Taxation in Myanmar, 2019.
40
Ibid
14
The Ministry of Finance and Revenue may with the endorsement of the Union
Government: -
i. prescribe, amend and add by notification the following;
a. assessable total income
b. rates of income-tax for each class of income
c. rates of income-tax for each class of income and assessable income
in respect of foreign currency receipts.
ii. issue a notification under sub-section (a)
a. the date of effect or the assessment year shall be specified
b. the tax shall be charged at rates prescribed
for each class of income for those who receive assessable total income within the year
relating to the assessment year or the date of effect as the case may be 41.
The below classes of income are exempt from income tax:
i. income received by a religious or charitable institution and applied
solely for religious or charitable purposes
ii. income of a local authority
iii. any receipt in respect of savings as prescribed by the Rules
iv. a sum received in commutation of a pension
v. compensation received for death or injury
vi. a sum received from an insurance; policy
vii. any receipt of a casual and nonrecurring nature excluding the following:
a. capital gains under section 13
b. income from an enterprise
viii. dividends from an association of persons 42.
The Ministry of Finance and Revenue may with the endorsement of the Union
Government propose amend and add the following grants by notification:
i. basic allowance in respect of an association of persons
ii. basic allowance in respect of an individual and allowance in respect of
spouse and children
a. In issuing a notification under subsection
b. the date of effect or the assessment year shall be specified
41
Section 4 of The Income Tax Law, 1974.
42
Section 5, Ibid
15
c. The following amount shall be deducted from the total income and the
tax shall be computed on the remaining amount of income:
(i) basic allowance in the case of an association of persons;
(ii) in the case of an individual
1. basic allowance
2. allowance in respect of the spouse and children of the assessee
3. premium paid for the life insurance policy of an assessee and
spouse
4. contribution towards savings funds as prescribed by the Rules.
Provided: Sub-section (a) & (c) shall not apply to the computation of capital gains
under section 13 or nonresident foreigner under section 26. (d) in making an assessment
under sub-Section (c) contributions to religious or charitable institutions, sponsored by
the State, or recognized by notification by the Ministry of Finance and Revenue may
be deducted but the deductions shall not exceed 25 per cent of the total income of the
assessee 43.
No income tax will be exacted on any individual who gets the income from
compensation up to 48 lakhs of kyats for every year. Being not evaluated over the
issues, if the proof archive relating the excluded income is mentioned, the Internal
Revenue Department will give it as per the specifications. Nonetheless, if an individual
wins income from pay every year surpasses 48 lakhs of kyats, he will be charged the
income tax on all out income. Nonetheless, if an individual wins income from pay every
year surpasses 48 lakhs of kyats or the income is from proficient business, undertaking
and different sources, the tax rate to be demanded on any individual as indicated by the
income section on the rest of the income, subsequent to setting off the reliefs under area
6 of the Income Tax Law from the all-out income, are endorsed as follows (Appendix
I Table 1) 44:
The basic relief shall, under clauses (i) and (ii) of subsection (a) of section 6 of the
Income Tax Law, be an equivalent amount with to 20 per cent of the income for each
type of income. Provided that, the total basic relief for a year shall not exceed than 10
million kyats 45.
43
Section 6 of The Income Tax Law, 1974.
44
45
Section 20, Ibid
16
According to clauses (i) and (ii) of subsection (a) of section 6 of the Income Tax
Law, the following reliefs permitted shall be deducted from the total income of the
individual in clause (ii) of subsection (c) of section 6 of the Income Tax Law and the
tax shall be levied on the remaining amount of income: (a) for a parent who stays
together Kyats 1,000,000 each, (b) for a spouse only Kyats 1,000,000 and (c) for a child
Kyats 500,000 each 46.
The income tax shall be levied at 10 per cent on the total income earned abroad in
the foreign currency except of the exempted heading of non-resident citizens before
deducting the relief under section 6 and section 6-A of the Income Tax Law 47.
In the event that an outsider is non-occupant, the reliefs under section 6 and 6-An of
the Income Tax Law will not be deducted. On account of income under the pay heading,
the income tax will be imposed on absolute income at the tax rates in (Appendix I,
Table 1).
The income tax shall be levied at the rates in section 19 (c) on the remaining
income after deducting reliefs under section 6 of the Income Tax Law from the net
profit of the basic cooperative societies registered and formed under the Cooperative
Society Law 48.
If a capital gain from selling, exchanging or transferring by any other means of
one or more assets, on the capital gains in kyats or foreign currency before deducting
reliefs under section 6 and 6-A of the Income Tax Law 49:
No income tax shall be levied if the total value of one or more capital assets
sold, exchanged or transferred by any other means within a year does not exceed 10
million kyats even though the capital gains arise from asset 50.
The Ministry of Planning and Finance may exempt or relieve the income tax
for the following matters with the approval of the Union Government:
i. the income tax matters relating to the businesses operated with the donation or
funds provided by domestic and international organizations to the Union
ii. the income tax matters relating to the public companies enrolled in Yangon
Stock Exchange for the development of the stock share market 51.
46
Section 21, of The Union Tax Law, 2019
47
Section 22, Ibid
48
Section 26, Ibid
49
Section 27, Ibid
50
Section 28, Ibid
51
Section 31, Ibid
17
2.2.2 Tax Rate for Commercial Tax

The Relevant Ministry, with the approval of the Union Government: (a) may
amend and add, by notification, the expressions in schedule of this Law or tax rates;
(b) shall prescribe the commencing date of effectiveness or financial year, in issuing
the notification under sub-section (a) 52.
Under section 6 of the Commercial Tax Law, the schedules annexed to the said
Law are prescribed as follows53:
i. No commercial tax will be charged on any of the following products: (schedule
II)
ii. Besides the products mentioned in subsection (i), the commercial tax will be
charged at 5 percent on the deal continues if the products are delivered and sold
in the nation or on the landed worth if the merchandise are imported. In the
event that a particular merchandise in section 11 of this Law is created and sold
in the nation, the commercial tax will be charged at 5 percent on the deal
continues including explicit products tax or on the landed worth including
explicit merchandise tax if the products are imported. Whoever will, other than
the merchandise and exercises of exchange absolved as per this Law, pay the
commercial tax at 5 percent on the deal continues for completing the
accompanying business exercises remembering the particular products for
section 11:
a. Importing products and reselling them in the country and
b. Trading.54
iii. No commercial tax shall be charged on the following services. (schedule III)
iv. The commercial tax shall be charged at 5 per cent on the receipt of the
remaining services provided in the country other than the services.
v. The commercial tax shall be charged at 3 per cent on the sales proceeds of the
building built and sold in the country. A person who builds and sells the
building shall comply with the duties and enjoy all rights mentioned in the
Commercial Tax Law and the Commercial Tax Regulations.
vi. The commercial tax shall be charged at 1 per cent on the sale proceeds of the
jewelry made by gold.
52
Section 3 of the Law Amending the Commercial Tax Law, 2006.
53
54
Business Setup Organization, Taxation in Myanmar, 2019
18
2.2.3 Tax Rate for Specific Goods

Based on the Union Tax Law enacted for any respective financial years:
i. the descriptions in the schedule of this Law may be amended, substituted, or
repealed
ii. the tax rate to be calculated based on value, quantity, weight, or any other
measurement of specific goods chargeable in the schedule of this Law shall be
stipulated
iii. specific goods chargeable to tax and tax rates for the export shall be stipulated.
The respective taxpayer shall send the required information to the Township
Revenue Officer in order to determine the selling price in accordance with the
stipulations relating to the unpaid tax for specific goods, manufactured or owned
locally. The Township Revenue Officer shall also seek that information55.
Under section 6 of the Specific Goods Tax Law, the schedules annexed to the said
Law are prescribed as follows56:
i. In respect of the specific goods in the following schedule, the specific goods
tax shall be charged at the specified tax rates shown against them; (mentioned
in Schedule I)
a. if the specific goods chargeable on the pricing tier are produced
domestically, on the sale price mentioned by the factory, workshop or
workplace, or the sale price estimated by the Director General and the
Management Committee of the Internal Revenue Department based on the
market price, or whichever is higher;
b. if the specific goods unspecified charging with the pricing tier, on the sale
price specified by the Management Committee of the Internal Revenue
Department; Exception - The Management Committee of the Internal
Revenue Department shall specify the price for the specific goods that are
manufactured locally the same as the landed value of those that are
imported, in order to complete with the imported goods in the market.
c. if imported into the State, on the landed value; and
ii. a person exporting the following specific goods shall pay specific goods tax on
the sale proceeds as the tax rates shown against them.
55
Section 6 of The Specific Goods Tax Law, (2016).
56
Section 11 of The Union Tax Law, 2019.
19
Other than the referenced specific goods (Log and various kinds of timber 10%),
the specific goods tax surveyed for the fare of the staying specific goods will not be
charged. The specific goods tax paid at the hour of procurement, importation or creation
of the goods will, as per the specifications, be set off from the specific goods tax
chargeable, for the fare of the specific goods.
Out of the specific goods tax chargeable under the Specific Goods Tax Law, the
specific goods tax shall not be assessed on the production and sale of tobacco, cheroots
and cigars in the country by the cooperative sector and the private sector if the total
sale proceeds within a year do not exceed 20 million Kyats57.
2.2.4 Tax Rate for Gemstones Tax

Under the Myanmar Gemstones Law section 38 which forces tax on whole
gemstones, cleaned gemstones, adornments and things made with gemstones as per
endorsed tax rates. Any gemstones tax gathered is to be transferred to the Internal
Revenues Department's bank account.
i. Sales of gemstones will be assessed based on the actual sales price or the sales
price as determined by the Myanmar Gemstones Enterprise, whichever is
higher.
ii. Tax applicable to the import of gemstones will be assessed based on the landed
cost. The applicable tax rates are as follows: (Appendix II, Table 3).
2.3 Other Taxes Rates to be Collected

The relevant Ministries concerned shall administer the tax rates, exemption and
relief of any of the following taxes in accordance with the existing law:
i. excise tax;
ii. licence fees, permit fees for imports;
iii. Myanmar Union lottery;
iv. fees for vehicle, driving licence and business licence;
v. court fees and stamp duty;
vi. licence fees for tour licence/ hotel and guesthouse licence/ transportation
licence/ tour guide business licence;
vii. customs duty;
57
Section 12 of The Union Tax Law, 2019.
20
viii. land revenue;

ix. water tax;
x. embankment tax;
xi. tax on production of forest materials;
xii. tax on production of minerals (excluding minerals for raw industrial materials
and decorative stones);
xiii. tax on fisheries;
xiv. tax on production of oil and natural gas;
xv. tax on minerals and gemstones;
xvi. tax on communication services;
xvii. Electricity charges received in term of free on the electricity of water resources;
xviii. Taxes collected from those who have the right to use vacant, fallow and virgin
land58.
These taxes are used by the government to fund public services and
infrastructure, regulated economic activity and influence social environmental policies.
2.4 Reporting, Duty and Power of the Ministry Concerned

The Ministry concerned shall send a quarterly report on the condition of
collection of the revenue estimate in schedule (1) of this Law to the Budget Department.
The Budget Department shall compile the lists of tax collection data sent by the
Ministries concerned and submit a quarterly report with comments through the Ministry
of Planning and Finance to the Union Government59.
The Union Government shall submit a six-monthly report on the condition of
collection of the revenue estimate in schedule (1) of the Union Tax Law to the
Pyidaungsu Hluttaw60.
The Ministry concerned shall take the responsibility of administering and
supervising for collecting the tax estimate in schedule (1) of this Law61.
The Ministry of Planning and Finance of the Union Government may issue
notification, order, directives and procedure, if necessary, without changing the original
meaning of the provisions, in order that enable people to know clearly, perform and
58
59
Section 6, Ibid
60
Section 7, Ibid
61
Section 8, Ibid
21
comply with the provisions of the specific goods tax, commercial tax and income tax
in this Law62.
The Ministry concerned may seek assistance from the President of the Union,
the Union Government, the Pyidaungsu Hluttaw, the Pyithu Hluttaw, the Amyothar
Hluttaw, the Supreme Court of the Union, the Constitutional Tribunal of the Union, the
Union Election Commission, the Attorney General of the Union, the Auditor General
of the Union, and Union Civil Service Board, Nay Pyi Taw Council, Union Ministries,
Central Bank of Myanmar, Region or State Government, Leading Bodies of Self-
Administered Division or Leading Bodies of Self-Administered Zones in order to
receive necessary information and aids for paying taxes by the tax payers in accordance
with Law63.
The tax year follows the fiscal year, starting from 1st October 2019 and ending
30th September 202064.
The progressive special effects of tax rate cuts on the size of the economy arise
because lower tax rates raise the after-tax reward to waged, redeemable, and financing.
These higher after-tax rewards induce more work strength, redeemable, and savings
through substitution effects. The annual tax return must be filled with the IRD by 31st
December of the following income year. Together with the Myanmar Companies Law,
the Myanmar Investment Law, Special Economic Zone Law and the latest Union Tax
laws it has become favorable for the investors to capitalize in the country as the
governmental organizations that are set up for rationalization processes and creating
new regulations are actively working towards with the intention to make it easier for
the businesses to set up in Myanmar. In the light of increased investment activity, the
government is seeking to improve the infrastructure, develop the existing business
ecosystem and create employment opportunities for its peoples if you are interested in
knowing more about setting up a business in Myanmar.
62
63
Section 10, Ibid
64
Section 1, Ibid
Chapter 3
Comparison of Investment Incentives between Union Tax Law and
Investment Laws in Myanmar
Myanmar’s economy has continuously grown at approximately 6 – 8% since
2012. Myanmar’s overall growth strategy is built on a complementary mix of policies
to simultaneously enable modernization in industry, agriculture and infrastructure, a
diversification of the export base and the expansion of value-added production for
domestic and international markets.
To encourage economic growth, three Special Economic Zones – in Thilawa,
Kyaukphyu and Dawei – have been set-up by the Myanmar government. These provide
investment incentives and simplified processes for investors, with the hope that these
international-standard industrial facilities will become growth engines of the new
Myanmar.65
65
www.dica.gov.mm
23
3.1 Tax Benefit of the Investment

Myanmar is offering zone-wise tax exemption to entrepreneurs investing in a
New Yangon City Project, aimed at attracting more investors to the city expansion
project being implemented on lands to the west of Yangon River.66
3.1.1 Tax Benefit under Myanmar Investment Law

The new MIL 2016 was enacted on 18 October 2016. The new MIL is a
consolidation of the Myanmar Citizen Investment Law (2013) and the MFIL (2012).
The Myanmar Citizen Investment Law and MFIL have been repealed with effect from
18 October 2016.
The list of tax benefits under the new MIL are as follows:
(i) For investments in sectors listed in a notification to be issued by the

Commission in order to promote investment, exemption from corporate tax
for seven, five, or three years, depending on whether the investment takes
place in an underdeveloped, moderately developed, or adequately
developed region or state. The designation of these zones are subject to
change from time to time, depending on the development in the respective
regions.
(ii) Income tax exemptions shall only be granted to sectors that the Commission
has specified as sectors that are promoted for investments.
(iii) The Commission may allow more favourable exemptions and reliefs for
locations where Myanmar citizen-owned businesses are operated. The
government may also provide subsidies, funding, capacity building, and
training to Myanmar citizen investors and citizen-owned small and
medium-sized enterprises.
(iv) Exemption from customs duties or other internal taxes or both on
machinery, equipment, instruments machinery components, spare parts,
construction materials not available locally, and materials used in the
business that are imported as they are actually required, during the
construction period, or during the preparatory period of the investment
business.
66
www.consult-myanmar.com
24
(v) Exemption or relief from customs duties and/or other domestic taxes on raw
materials and semi-finished goods that are imported for the production of
export goods by wholly export investment businesses.
(vi) Right to obtain a refund, based on the amount of exported goods, of customs
duties and/or other domestic taxes paid at the time of importation of raw
materials and semi-finished goods that are used to manufacture the products
in the country and re-export them.
(vii) If the volume of investment is increased and the original investment
business is expanded during the period of investment, exemption or relief
from customs duties or other internal taxes or both on machineries,
equipment, instruments, machinery components, spare parts, materials used
in the business, and construction materials not available locally, which are
imported as they are actually required for use in the business that is being
expanded.
(viii) Exemption or relief from income tax if the profits obtained from the
investment business is reinvested in the same business or in a similar type
of investment business within one year.
(ix) Right to deduct depreciation for the purpose of income tax assessment, after
computing such depreciation from the year of commencement of
commercial operation based on an accelerated depreciation rate (which is
less than the stipulated lifetime of the asset).
(x) Right to deduct expenses from assessable income incurred for research and
development (R&D) related to the investment activities/business required
for the development of the country and carried out in the country.
(xi) Foreign investors will pay income tax at the rates applicable to citizens
residing within the country67.
Under the MFIL, companies registered under the MFIL that have obtained permits
from the MIC were entitled to the following special benefits and tax incentives, which
were granted at the MIC’s discretion:
67
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25
(i) Exemption from income tax for up to five consecutive years for an
enterprise. The exemption may be extended for a further reasonable
period, depending on the success of the enterprise.
(ii) Exemption or relief from income tax on profits of a business that are
maintained in a reserve fund and subsequently re-invested in Myanmar.
(iii) The right to deduct depreciation of machinery, equipment, building, or
other capital assets used in the business at rates prescribed by the MIC.
(iv) Relief from income tax for up to 50% of the profits accrued from the
export of manufactured goods.
(v) The right to pay income tax on the income of foreigners at the rates
applicable to citizens residing within the country.
(vi) The right to deduct from taxable income R&D costs that are necessary
for the country.
(vii) The right to carry forward tax losses for up to three consecutive years,
provided the losses are sustained within two years from the end of the
tax exemption in (1) above.
(viii) Exemption or relief from customs duty and/or other internal taxes on
imported machinery, equipment, instruments, machinery components,
spare parts, and materials used in the business, which are required for
use during the period of construction.
(ix) Exemption or relief from customs duty or other internal taxes on
imported raw materials for the first three years of commercial
production following the completion of construction.
(x) If the investor increases the amount of investment and expands the
business within the approved timeframe, it may enjoy exemption and/or
relief from customs duty or other internal taxes on machinery,
equipment, instruments, machinery components, spare parts, and
materials that are imported for the expansion of business.
(xi) Exemption from commercial tax on goods that are manufactured for
export.
Except for item (1) above, the other exemptions and reliefs are subject to
discretion of the MIC68.
68
www.taxsummaries.pwc.com/myanmar/corporate/tax-credits-and-incentives
26
Companies may be granted a wide range of benefits under Myanmar Investment

Law, subject to the approval of the Myanmar Investment Commission (MIC). The
benefits include (i) 3,5 or 7 years of income tax exemption, depending on the location
(ii) exemption from customs duty and internal taxes on machinery and raw material of
import oriented business (iii) reimbursement of customs duty and internal taxes on
imported raw materials and partially manufactured good (iv) right to accelerated
depreciation of fixed assets and (v) deduction for research and development expenses
carried out in Myanmar.69 (Appendix VI, Table 8)
3.1.2 Tax benefit under Myanmar Special Economic Zone Law

In addition to foreign investment under the MFIL, foreign investors may invest
under the Myanmar Special Economic Zone Law of 2014 (Myanmar SEZ Law).
The Myanmar SEZ Law is a basic law for any SEZ within Myanmar. The main
regulatory body handling foreign investment under the Myanmar SEZ Law is the
Central Body for the Myanmar SEZ.
The Myanmar SEZ Law contains provisions relating to the exempted zone,
business promoted zone, other zone, exempted zone business, other business,
developers and investors, exemptions and reliefs, restrictions, duties of developers or
investors, land use, banks and finance management and insurance business,
management and inspection of commodities by the customs department, quarantine,
labor and guarantee of non-nationalization, dispute resolution, WHT, bank and
financial management and insurance business, etc.70 (Appendix VI, Table 9)
Land use may be granted under an initial lease of up to 50 years and renewable
for a period of an additional 25 years. Developers/investors may rent, mortgage, or sell
land and buildings to another person for investment purposes within the term granted
with the approval of the management committee concerned.
Investors seeking to register an entity under the SEZ need to obtain an
investment permit from the relevant SEZ Management Committee.71
The Myanmar SEZ Law contains provisions relating to the exempted zone,
business promoted zone, other zone, exempted zone business, other business,
developers and investors, exemptions and reliefs, restrictions, duties of developers or
69
KPMG, Investing in Myanmar, 2018
70
Chapter IX and X of The Myanmar Special Economic Zone Law, 2014
71
www.pwc.com, tax summaries of Myanmar, 2020
27
investors, land use, banks and finance management and insurance business,
management and inspection of commodities by the customs department, quarantine,
labour and guarantee of non-nationalisation, dispute resolution, WHT, bank and
financial management and insurance business, etc.
Incentives under the Myanmar SEZ Law include:
For investors:
(i) Income tax holidays for the first seven years starting from the date of
commercial operation in respect of those investment businesses
operated in an exempted zone or exempted zone businesses.
(ii) Income tax holidays for the first five years starting from the date of
commercial operation in respect of those investment businesses
operated in a business promoted zone or other business in a promoted
zone.
(iii) 50% income tax relief for the investment businesses operated in an
exempted zone and a business promoted zone for the second five-year
period.
(iv) For the third five-year period, 50% income tax relief on the profits of
the business if they are maintained for re-investment in a reserve fund
and re-invested therein within one year after the reserve is made.
(v) Exemption on customs duty and other taxes for raw materials,
machinery and equipment, and certain types of goods imported for
investors in exempted zones; whereas, for investors in prompted zones,
exemption on customs duty and other taxes for the first five years in
respect of machinery and equipment imported that are required for
construction starting from the date of commercial operation, followed
by 50% relief of customs duty and other taxes for a further five years.
(vi) Carry forward of loss for five years from the year the loss is sustained.
For developers:
(i) Income tax holidays for the first eight years starting from the date of
commercial operation.
(ii) 50% income tax relief for the second five-year period.
(iii) For the third five-year period, 50% income tax relief on the profits of
the business if they are maintained for re-investment in a reserve fund
and re-invested therein within one year after the reserve is made.
28
(iv) Exemption on customs duty and other taxes for raw materials,
machinery and equipment, and certain types of goods imported.
(v) Carry forward of loss for five years from the year the loss is sustained.
Land use may be granted under an initial lease of up to 50 years and renewable
for a period of an additional 25 years. Developers/investors may rent, mortgage, or sell
land and buildings to another person for investment purposes within the term granted
with the approval of the management committee concerned.
Investors seeking to register an entity under the SEZ need to obtain an
investment permit from the relevant SEZ Management Committee72.
3.1.3 Tax Benefit Under Myanmar Foreign Investment Law (MFIL)

The Myanmar Investment Law provides foreign investors with a number of tax
holidays. Below is the list of the most significant exemptions and reliefs (i) Income tax
exemption is granted for a period of 3 to 7 consecutive years (ii) Income tax exemption
and relief is granted on the profit obtained from the investment that has obtained a
Permit or an Endorsement is re-invested in such investment or in any similar type of
investment or in any similar type of investment activities within one year. (iii) The right
to deduct depreciation for the purpose of income tax assessment, after computing such
depreciation from the year of commencement of commercial operation based on a
depreciation rate which is less than the stipulated lifetime of the machinery, equipment,
building or capital assets, can be used in the investment (iv) The right to deduct
expenses for research and development activities carried out in Myanmar. The
activities must be both relevant and necessary to the business objective (v) Exemption
and relief for custom duty or other internal taxes (or both) on imported machineries and
equipment’s, instrument, machinery components, spare parts, construction materials
not available locally, and material used in business during the construction period. (vi)
Exemption and relief for custom duty or other internal taxes(or both) on the importation
of the raw materials and partially manufactured goods conducted by an export-oriented
investment business for the purposes of the manufacture of products for export and
reimbursement of customs duty or other internal taxes or both on imported raw
materials and partially manufactured goods which are used to manufacture products for
export (vii) Exemption and relief for custom duty or other internal taxes(or both)
72
www. taxsummaries.pwc.com/myanmar/corporate/tax-credits-and-incentives
29
investors who supply all of their finished goods and semi-finished goods manufactured
locally to investment business which are 100% export-oriented without supplying the
domestic market can apply for exemption and relief for custom duty or other internal
taxes (or both) on the importation of the raw materials and partially manufactured
goods conducted by an export-oriented investment business for the purposes of the
manufacture of products for export and reimbursement of customs duty or other
internal taxes or both on imported raw materials and partially manufactured goods.
Detailed information would be described in the Myanmar Investment Law Section
75(a), 77 (a), 77(b), 78 (a), 78(b),78(c) and Notification no. 87/2017.73
3.2 Investment Benefit under Union Tax Law

There are many tax exemptions under Union Tax Law according to the products
and type of business. An investment permit issued by the MIC for qualified projects
provides a number of advantages that have been specified in the Myanmar Investment
Law 2016.74
Without contrary to the international agreements signed by the State, in order
to sell the goods produced in the State and the goods imported competitively in the
market and develop long-term benefit of the domestic agriculture and livestock farming
mainly based on the domestic production activities and the current domestic and
foreign investment, the Union Government shall:
(a) carry out to obtain the highest advantages and reliefs as the ASEAN
countries within the framework of the World Trade Organization, the World
Customs Organization and ASEAN Free Trade Agreement with regard to the
permitted amount of import and the customs duty rates;
(b) make the necessary arrangement in accordance with the provisions of the c
ustoms law or import and export procedures and quota allocation75.
Myanmar has signed the ASEAN Comprehensive Investment Agreement with
other nine ASEAN member states in 2012. In addition, ASEAN has signed Free Trade
Agreements with China, South Korea, Australia/New Zealand and India. Therefore,
Myanmar has FTA with four countries. Myanmar has Bilateral Investment Treaties
73
Myanmar Investment Guide 2018
74
VDB Loi, Myanmar Tax Booklet 2019 ,19
75
30
with 12 countries which include Israel, South Korea, the United States of America,
Indonesia, Japan, India, Thailand, Kuwait, Laos, China, Vietnam, Philippines.76
3.3 Policy, Impacts and Restriction

SEZs are considered a core part of trade and investment policy for countries in
the Lower Mekong Region, Myanmar included. SEZs are included and specifically
encouraged in the 2016 Investment Policy.77 The law indicates that SEZs are intended
to help Myanmar in supporting the national economic development plan, boosting
employment, and promoting domestic and foreign investment.78
SEZs are considered by multilateral development banks, such as the ADB, to
be tools of development that, if designed and regulated properly, could continue to
bring in foreign investment, encourage better policy reforms, and improve domestic
industries. In Myanmar, these benefits remain to be seen, since of the four expected
SEZs, only Thilawa SEZ is operational.79 In Myanmar, these benefits remain to be seen,
since of the four expected SEZs, only Thilawa SEZ is operational.
To ensure a smooth transition for local companies adjusting to the opening up
of Myanmar’s markets, restrictions on foreign investment have been put in place in
selected sectors. The restrictions are publicly issued as rules or notifications.
i. Investment activities allowed to be carried out only by the Union
ii. Investment activities that are not allowed to be carried out by foreign
investors
iii. Investment activities allowed only in the form of a joint venture with
any citizen owned entity or any Myanmar citizen
iv. Investment activities to be carried out with the approval of the relevant
ministries.
A comprehensive list of economic activities that may be undertaken as a joint
venture with any citizen owned entity or any Myanmar citizen, as well as those which
are permitted under specific conditions or require the approval of the relevant
76
77
Myanmar Investment Committee. 2016. Investment Policy. Accessed June 24, 2019.
78
Pyidaungsu Hluttaw. Myanmar Special Economic Zone Law, 2014, pg. 4-5, Accessed June 13,
2019.
79
Asian Development Bank. 2015. ASIAN ECONOMIC INTEGRATION REPORT 2015: How can
special economic zones catalyze economic development
31
ministries, may be obtained from the Directorate of Investment and Company

Administration (DICA).
vi
Conclusion
The core objective of this term paper is to understand about the Union Tax Law
in Myanmar enacted by Pyidaungsu Hluttaw. The Union Tax Law 2024 to a great
extent gives ideal expense rates and exclusions for citizens, especially concerning
charge reprieve on undisclosed wellsprings of salary. This duty absolution is a
significant expense improvement in itself and is an open door that can be investigated
by citizens to address any charges that were already not pronounced. That the reprieve
will activate private assets and result in progressively capital infusion into Myanmar's
monetary framework. The Union Tax Law and Investment Laws offer different
incentives to encourage investment in the country. The Union Tax Law provides tax
incentives such as tax holidays, accelerated depreciation, and reduced tax rates for
certain industries or regions. On the other hand, the Investment Laws offer incentives
such as tax exemptions, duty exemptions on imported machinery, and land lease rights
for longer periods. While both the Union Tax Law and Investment Laws in Myanmar
aim to create a conductive environment for economic activities, they serve different
purposes and offer distinct incentives. The Union Tax Law establishes the general tax
framework and ensures tax compliance, whereas the Investment Laws are designed
specifically to attract and protect investments through a broader range of incentives and
guarantees. For investors seeking significant benefits, the Investment Laws provide
more attractive and targeted incentives, particularly in priority sectors and regions,
alongside robust protections that contribute to a more secure investment climate. The
enacted Laws and Acts should be act according to the enactment and take actions on
those who ignore. The respected ministries should give out a full power authority on
the law to the respected department under them to take a good action on the enacted
Law and Acts exclusive of any fraud and make the enacted Law and Acts successful.
vii
References
Laws and Acts
1. The Commercial Tax Law (1990)
2. The Gemstone Tax Law (2019)
3. The Income Tax Law (1974)
4. The Myanmar Stamp Act (1899)
5. The Myanmar Special Economic Zone Law (2014)
6. The Specific Goods Tax Law (2016)
7. The Myanmar Investment Law (2016)
8. The Union Tax Law (2024)
Books
1. Robert C. Brown, "The Nature of Income Tax" (1933)
2. Roy Bahl, Property Transfer Tax and Stamp Duty, 2004
3. OECD, Addressing the Tax Challenges of Digital Economy 2016
4. VDB Loi, Myanmar Tax Booklet 2018
5. VDB Loi, Union Tax Law 2018
6. World Bank Group, Myanmar Public Expenditure Review 2018: Fiscal Space for
Economic Growth (Yangon: World Bank, 2018).
7. Asian Development Bank. 2015. ASIAN ECONOMIC INTEGRATION
REPORT 2015: How can special economic zones catalyze economic development
8. Myanmar Investment Guide 2018
9. The Myanmar Investment Committee (2016)
10. KPMG, Investing in Myanmar 2018
11. Ngwe Lin Myar Chit, Union Taw Law 2019, Everything you need to know about
amnesty, Specific Goods Tax Change, 2019
Websites
1. https://www.ird.gov.mm (Internal Revenue Department)
2. https://www.charltonsmyanmar.com/tax-in-myanmar
3. http://www.vdb-loi.com/mlw/union-tax-law-2019-everything-you-need-to-know-
about-amnesty-exemptions-and-significant-changes/
4. https://taxsummaries.pwc.com/myanmar/corporate/taxes-on-corporate-income
viii
5. https://www.pwc.com/mm/en/publications/assets/tax-updates/pwc-newsletter-
issue-23.pdf
6. https://opendevelopmentmyanmar.net/topics/taxation/
7. https://data.oecd.org/tax/social-security-contributions.htm
8. https://www.dfdl.com/resources/legal-and-tax-updates/myanmar-tax-update-
myanmar-introduces-a-tax-amnesty-and-other-significant-changes-under-the-
2019-union-tax-law/
9. http://www.interactivemyanmar.com/accounting/myanmar-double-taxation-
agreements/
10. www.consult-myanmar.com
11. axsummaries.pwc.com/myanmar/corporate/tax-credits-and-incentives
ix
Appendix
Appendix I
Table I
Income Bracket and Tax Rate
Sr. No Income Bracket to be Levied Income Tax Rates
From To to be Levied
Kyats Kyats
1 1 2,000,000 0 per cent
2 2,000,001 10,000,000 5 per cent
3 10,000,001 30,000,000 10 per cent
4 30,000,001 50,000,000 15 per cent
5 50,000,001 70,000,000 20 per cent
6 70,000,001 and above 25 per cent
Table 2
Income Tax Rate
Sr. No Income Bracket to be Levied Income Tax Rates
From To to be Levied
Kyats Kyats
1 1 100,000,000 3 per cent
2 100,000,001 300,000,000 5 per cent
3 300,000,001 1,000,000,000 10 per cent
4 1,000,000,001 3,000,000,000 15 per cent
5 3,000,000,001 and above 30 per cent
x
Table 3
Gemstones Tax Rate
Type of Gemstones Tax Rate
Uncut jades 11%
Rubies, sapphires, and other uncut gemstones (except

9%
for diamonds and emeralds)
Polished jades, rubies, sapphires, and other gemstones

(except for diamonds and emeralds). Also, polished
jewellery in which jades, rubies, sapphires, and other 5%
valuable gemstones (except for diamonds and
emeralds) are embedded.
Items made from gemstones 5%
Table 4
Tax Rate on Unassessed Income Declared
Unassessed Income Declared in Kyat (K) Tax Rate Offered
From K 1 to K 100,000,000 3%
From K 100,000,001to K 300,000,000 5%
From K 300,000,001 to K 1,000,000,000 10%
From K 1,000,000,001 to K 3,000,000,000 15%
3,000,000,001 and above 30%

xi
Appendix III
Table 5
Tax Rate Increased on Various Kinds of Cigarettes
Tax Rates Applicable to Various Kinds of Cigarettes
Price Range for a Pack New Tax Rate Old Tax Rate
Containing 20 Sticks (Per Stick) (Per Stick)
Up to K 600 K8 K6
From K 601 to K 800 K 17 K 14
From K 801 to K 1,000 K 22 K 19
From K 1,001 and above K 25 K 21

xii
Appendix IV
Table 6
Tax Rate changed on Various Kinds of Liquor
Tax Rates Applicable to Various Kinds of Liquor
Price Range Tax Rate
From K 400 to K 1,000 per litre (L) K 170 per L
From K 1,001 to K 2,000 per L K 424 per L
From K 2,001 to K 3,000 per L K 707 per L
From K 3,001 to K 4000 per L K 990 per L
From K 4,001 to K 5,000 per L K 1,273 per L

xiii
K 15,001 and above per L 60% of the 1 L price

Appendix
V
Table 7
Tax Rate changed on Gemstones Tax
Type of Gemstones Tax Rate
Uncut jades 11%
Rubies, sapphires, and other uncut gemstones (except

9%
for diamonds and emeralds)
Polished jades, rubies, sapphires, and other gemstones

(except for diamonds and emeralds). Also, polished
jewellery in which jades, rubies, sapphires, and other 5%
valuable gemstones (except for diamonds and
emeralds) are embedded.
Items made from gemstones 5%

xiv
Appendix VI
Table 8
Tax Exemption Period Under Myanmar Investment Law
Zone Tax Exemption Period
Zone 1 (Less Developed) 7 Years
Zone 2 (Moderately Developed) 5 Years
Zone 3 (Developed) 3 Years
Table 9
Incentives Under Myanmar SEZ Law for Investors and Developer
Investors Developers
1 Income tax holidays for fist 7years Income tax holiday for fist 8 years
2 50% income tax relief for the 50% income tax relief for the second
investment businesses operated in five-year period.
an exempted zone and a business
promoted zone for the second five-
year period.
3 For the third five-year period, 50% For the third five-year period, 50%
income tax relief on the profits of income tax relief on the profits of the
the business business
4 Exemption on customs duty and Exemption on customs duty and other
other taxes for raw materials, taxes for raw materials, machinery and
machinery and equipment, and equipment, and certain types of goods
certain types of goods imported for imported.
investors in exempted zones;
whereas, for investors in prompted
zones, exemption on customs duty
and other taxes for the first five
years in respect of machinery and
equipment imported that are
required for construction starting
from the date of commercial
xv
operation, followed by 50% relief

of customs duty and other taxes for
a further five years.
5 Carry forward of loss for five years Carry forward of loss for five years from
from the year the loss is sustained. the year the loss is sustained.
Table 10
Incentive Under Myanmar SEZ Law
Exemption and Relief Free/ Exempt Zone Promotion Zone
7 years of CIT exemption 5 years of CIT exemption
from the start of from the start of
commercial operations commercial operations
CIT rate reduction of 50% CIT rate reduction of 50%

for the following 5-year for the second 5-year
Tax holiday period period
50% of the profits 50% of the profits

exempted for the next 5- exempted for the third 5-
year period (requires year period (requires
reinvestment of profits reinvestment of profits
within 1 year) within 1 year)
Exemption from customs Exemption from customs

duty and other taxes on duty and other taxes for 5
imports of: raw materials years and a 50% reduction
to be used in production; for another 5 years on
Customs duty and other
machinery and spare imports of: equipment and
taxes
parts; construction spare parts to be used in
materials to construct a the business (and not for
factory, warehouse, and trading purposes);
offices; and vehicles and construction materials to
construct a factory, and
xvi
other equipment required warehouse; vehicles and

for the business other equipment required
for the business
Can apply for a refund of
the customs duty and
other taxes paid on the
import of raw materials,
provided semi-finished or
finished goods are
exported
Carry forward and set off Can be carried forward Can be carried forward
of losses for 5 years for 5 years
Table 11
Incentives Under Union Tax Law
Advantage Description
1 CIT holiday Only promoted business activities
mentioned under MIC Notification 13/2017
is entitled to apply for income tax holiday.
Depending on the investment zone, the CIT
holiday period can be 7 years (Zone 1), 5
years (Zone 2) and 3 years (Zone 3).
2 Tax-free profit if Profit which is reinvested within one year
reinvested is exempt from CIT, including the profit
reinvested in another similar type of
business
3 Depreciation Accelerated depreciation may be allowed to
start from the date of commercial operation
4 Equal income tax rate Income tax rates on foreign investors are the
same as on resident citizens
5 R&D deduction Right to deduct R&D costs from assessable
income
6 Exemption for Exemption from customs duty and other
xvii
imports of machinery, local taxes during the construction period

equipment, materials, and expansion period of the project
spare parts,
construction
materials that cannot
be
purchased locally
7 Exemption for raw Exempt from customs duty and other local
materials and semi taxes for businesses which export their
finished goods entire production
8 Refund of tax and When goods are exported, refund of
duty customs duty and other local taxes paid
in case of export on the import of the raw materials and
semi-finished goods of those goods that are
exported
Appendix VII
Table 12
Penalties for failure to issue invoices and attach CT labels on invoices
Offense Penalty
Not issuing invoices to customers or 100% of the additional tax payable on
incorrectly using CT labels (or stickers) the invoice amount plus a fixed amount
on invoices per offense:
§ First Offense: MMK 0.5 million
§ Second Offense: MMK 1 million
§ Third Offense: MMK 1.5 million
§ Fourth Offense and thereafter:

MMK 2 million
Selling goods to customers without the 100% of the value of the goods
corresponding CT labels (stickers)
xviii
Schedule
Schedule I
Tax Rate for Specific Goods
No Description of Goods Price Level Tax Rate
1 (a) Various types of cigarette up to sale price of 600 8 kyats per
kyats for a pack of 20 cigarette
cigarette
(b)Various types of cigarette Between the sale price 17 kyats per
of 601-800 kyats for a cigarette
pack of 20 cigarette
(c) Various types of cigarette Between the sale price 22 kyats per
of 801-1000 kyats for a cigarette
(d) Various types of cigarette the sale price of 1001 25 kyats per
kyats and above for a cigarette
2 Tobacco 60 %
3 Cured virginia tobacco 60 %
4 Cheroot 75 pyar per
cheroot
5 Cigar 80 %
6 Pipe tobaccos 80 %
7 Various types of betal 80 %
chewing preparation
8 (a) Various types of liquor Between 200 - 1000 170 kyats per litre
kyats per litre
(b) Various types of liquor Between 1001- 2000 424 kyats per litre
kyats per litre
(c) Various types of liquor Between 2001- 3000 707 kyats per litre
kyats per litre
(d) Various types of liquor Between 3001- 4000 990 kyats per litre
kyats per litre
xix
(e) Various types of liquor Between 4001- 5000 1273 kyats per
kyats per litre litre
(f) Various types of liquor Between 5001- 6000 1555 kyats per
(g) Various types of liquor Between 6001- 7000 1838 kyats per
(h) Various types of liquor Between 7001- 8000 2121 kyats per
(i) Various types of liquor Between 8001- 9000 2404 kyats per
(j) Various types of liquor Between 9001- 10000 2686 kyats per
(k) Various types of liquor Between 10001- 11000 2969 kyats per
(l) Various types of liquor Between 11001- 12000 3252 kyats per
(m) Various types of liquor Between 12001- 13000 3535 kyats per
(n) Various types of liquor Between 13001-14000 3817 kyats per
(o) Various types of liquor Between 14001- 15000 4100 kyats per
(p) Various types of liquor 15001 kyats and above 60 % of the price
per litre of a litre
9 Various types of beer 60 %
10 (a) Various types of wine up to 750 kyats per litre 81 kyats per litre
(b) Various types of wine Between 751 - 1500 244 kyats per litre
kyats per litre
(c) Various types of wine Between 1501 - 2250 406 kyats per litre
kyats per litre
(d) Various types of wine Between 2251 - 3000 569 kyats per litre
kyats per litre
xx
(e) Various types of wine Between 3001 - 3750 732 kyats per litre
kyats per litre
(f) Various types of wine Between 3751 - 4500 894 kyats per litre
kyats per litre
(g) Various types of wine Between 4501 - 6000 1138 kyats per
(h) Various types of wine Between 6001 - 7500 1463 kyats per
(i) Various types of wine Between 7501 - 9000 1788 kyats per
(j) Various types of wine Between 9001 - 10500 2113 kyats per
(k) Various types of wine Between 10501 - 13500 2600 kyats per
(l) Various types of wine Between 13501 – 16500 3250 kyats per
(m) Various types of wine Between 16501 and 50 % of the price
above per litre of a litre
11 Logs and different types of 5%
timber
12 (a) Engine power from 1501 10 %
CC to 2000 CC vans,
saloons, sedans, wagons,
estate wagons and coupes
except Double Cab 4 Door
pick up
(b) Engine power from 2001 30%
CC to 4000 CC vans,
saloons, sedans, wagons,
estate wagons and coupes
except Double Cab 4 Door
pick up
xxi
(c) Engine power above 50%

4001 CC vans, saloons,
sedans, wagons, estate
wagons and coupes except
Double Cab 4 Door pick up
13 Kerosene, petrol, diesel oil, 5%
jet fuel
14 Natural gas 8%
Schedule II
No commercial tax shall be charged on any of the following goods
Sr. No Types of Goods
1 Paddy, rice, broken rice, rice bran, chaff, and paddy husk, Wheat, wheat
bran and wheat husk, Various types of maize and corn powder.
2 Various types of pulse, split, powdered pea, pea bran and pea shell,
Shelled and unshelled groundnut, Sesame, flower sesame, Residual oil-
cake of groundnut, sesame, cotton seed, rice bran etc.
3 Garlic, onion, Potato, Spicy leaf, fruit, seeds, barks, prepared spices,
Chilli, chilli powder, Turmeric, turmeric powder, Ginger, Ripe tamarind,
Various types of salt
4 Various fresh fruits, Vegetables.
5 Pickled or dried tea leaf, sweet dried tea leaf, various types of packed
dried tea leaf.
6 Fresh fish, fresh prawn, fresh meat, Various types of eggs such as hen and
duck eggs.
7 Groundnut oil, sesame oil.
8 Sugarcane, sugar, jaggery, brown slab sugar, milk, condensed milk,
evaporated milk, various types of powdered milk, Soy milk.
9 Various types of fish sauce, Various kinds of dried fish and dried prawns,
Various kinds of pickled fish and pickled prawn, Various types of fish
paste, Powdered prawn, powdered fish.
10 Mulberry leaf, Cocoon.
xxii
11 Live animals, fish, prawn, terrestrial animals, aquatic animals,

amphibians, their eggs, embryo, newborns, species, aquatic plants and
seeds, sprout and algae.
12 Various types of fertilizer using for growing and blossoming of plants
including soil, chemical fertilizer, Various kinds of insecticide, weed-
killer that are used in agriculture, preventative medicine and pesticide that
used in agriculture for not occurring fungi, bacteria, nematodes and other
diseases, disinfectant that are used in livestock (not including mosquito
insecticide for home, spray, pesticide), Animal, fish and prawn
medicines, veterinary preventive medicines (including the medicine and
veterinary preventive medicines that approved by Ministry of Agriculture,
Livestock and Irrigation Development), Raw and finished materials for
animal, fish and prawn feed (not included animal food that used for pets).
13 Oil palm, Sunflower seeds, cotton seeds, cotton seeds, Pumpkin seed,
watermelon seed, cashew nut, Betel nut, betel nut shell, Pure seeds and
seedlings of crops.
14 Various types of cotton, Cardomon plant, thanakha and agricultural land
and gardening products, not elsewhere specified, Coconut oil (not palm
oil).
15 Coir yarn.
16 Firewood, bamboo, Finished and unfinished cane, Firewood substitute
fuel stick.
17 Lac, Various types of stamp (including revenue stamp).
18 State flag.
19 Slate, slate pencil and chalk, Graphite for the production of pencils.
20 Various kinds of textbooks, various kinds of educational and technical
books to be used in college and university, various kinds of exercise and
drawing books, fiction and non-fiction books, magazine, journal and
various types of newspaper and paper sheets for the production of such
books (within 40 Gsm to 80 Gsm) and all sorts of pencils, Various types
of ruler, eraser, pencil sharpener..
21 Herb.
22 Honey and bee wax.
xxiii
23 X-ray film plates and X-ray material and other medical equipment that
identified by health department, Absorbent cotton wool, gauze, bandages,
hospital sundries to take medicines, surgical mask (once used), cap,
surgical glove, masks that used to prevent flu infection, Household
pharmaceutical and other medicines and traditional medicines (the
medicines that received FDA registration other than medicines stipulated
by law, rule), Raw medicine including traditional medicines.
24 Condom.
25 Various types of rosary (not including rosary made by precious
gemstones), Religious clothes (robe etc).
26 Fire-engine, hearse.
27 Fuel sold by the Ministry of Electricity and Energy to foreign embassies,
UN organizations and foreign diplomats.
28 Jet fuel sold to be used for planes flying abroad.
29 Machine, machinery and equipment and the spare parts of planes or
helicopters.
30 Bleaching substance (only Hydrochlorite using in bleaching).
31 Jute and other fibers, Rubber,
32 Equipment, machines and spare parts, tractors for farm and livestock,
equipment, various types of machine and spare parts (other than vehicle
13 that need to register according to motor vehicles Act) operated from
the time of preparation of soil to harvest time with human labour or
animals or machine efficiency separately, equipment, machine and spare
parts that used in livestock, Breeds, eggs (including freeze breed) for
using in inseminating, larvae and equipment that used for insemination.
33 Solar panel, solar charger, controller and solar inverter.
34 Raw materials or goods to be used directly as parts of goods provided by
foreign resident supplier to use for production of finished goods on a
CMP (cut the fabric, make garments, Trim/Pack the garments) basis or
goods used for packaging the finished product, according to the need,
machine , machinery, equipment and their spare parts (not for sale)
imported by the business that operates on a CMP (cut the fabric, make
garments, Trim/ Pack the garments).
xxiv
35 Weapons, vehicles, machineries, accessory and equipment, spare parts

and accessories thereof used by State Defense and Security Organizations,
Various kinds of gun powder, various kinds of dynamites and related
substances used by civil departments (only the things that imported with
the permission of Office of the Commander - in -Chief (Army)), Goods
purchased for the use of defense services and for the consumption of
defense services personnel incurred from the expenditure allotted in the
budget accounts for the Ministry of Defense.
36 Pure gold (standard gold bars, gold block, gold coins), In uncut forms and
finished in cut forms of jade, ruby, sapphire selling at the Myanmar’s Gems
and Jewelly supervised and held by the Government in country.
37 Oil dregs.
38 Materials sold in foreign currency to overseas passengers at specific
places.
39 Goods to be used by foreign embassies or small embassies and their
diplomats and non- diplomat staff inclusive of reciprocal right policy
between two countries.
40 Goods purchased with the donation or funds provided by domestic and
foreign organizations to the State.
41 Goods exempted by the Pyidaungsu Hluttaw as per the needs of the State.
42 Goods imported by temporary admission or drawback system in
accordance with the Custom’s procedures
xxv
Schedule III
No commercial tax shall be charged on any of the following services.
Sr. No Types of Services
1 Services acquired by foreign embassies or small embassies and their
diplomats and non-diplomat staff inclusive of reciprocal right policy
between two countries.
2 Printing service by the security printing of the Ministry of Defense.
3 Culture and fine art service.
4 Renting of parking space service.
5 Transportation of goods service (Transportation by train, motor vehicles,
vessels, airplanes and machineries except the pipeline transportation).
6 Moving household service.
7 Collecting toll service.
8 International passenger air transport service.
9 Public transportation service.
10 Postal Service
11 Education service
12 Book, magazine, journal, newspaper
13 Healthcare service except body fitness,
14 Traditional massage service/ Blind massage service.
15 Animal healthcare and welfare service.
16 Collecting fees at public toilet service.
17 Life insurance service.
18 Microfinance service.
19 Capital market service.
20 Monetary service providing with the permission of the Bank and Central
Bank.
21 Customs and port clearance service.
22 Union Lottery service.
23 Hiring of equipment used in catering service.
24 Funeral service.
25 Childcare service.
26 Providing raw materials in return for finished goods system service
xxvi
27 Mechanized agriculture service. publishing service.
28 Electricity
29 Licence fees to be paid to State organizations for carrying out any matter
to get the permission.
30 Services exempted by the Pyidaungsu Hluttaw as per the needs of the
State.
31 Service acquired with the donation or funds provided by domestic and
foreign organizations to the State.
32 Services provided each other by the organization such as the President’s
Office, the Union Government’s Office, the Pyidaungsu Hluttaw Office,
the Pyithu Hluttaw Office, the Amyotha Hluttaw Office, the Supreme
Court of the Union, the Constitutional Tribunal of the Union, the Union
Election Commission Office, the Union Attorney General’s Office, the
Union Auditor General’s Office and the Union Civil Service Board
Office, Union Ministries, the Nay Pyi Taw Council Office, the Central
Bank of Myanmar, Social Security Board , State or Region Government’s
Office, Departments (Services provided by State- owned enterprises and
services acquired by State owned enterprises are not included).

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CENTRE FOR HUMAN RESOURCE DEVELOPMENT

YANGON UNIVERSITY OF DISTANCE EDUCATION

A STUDY OF THE UNION TAX LAW IN MYANMAR

POST GRADUATE DIPLOMA IN LAW

CGT Capital Gains Tax

1.1 Nature of Tax

1.2 Types of Tax

1.2.1 Income Tax

tax liability (including interest and penalties) relating to a previous

1.2.2 Commercial Tax

1.2.3 Specific Goods Tax (2016)

1.2.4 Gemstones Tax

1.2.5 Stamp Duties

1.2.6 Property Tax

1.2.7 Penalty or Fine

2.1 Extent of The Union Tax Law

2.2 Pertinent Tax Laws

Pyidaungsu Hluttaw; the Union Parliament endorsed the Union Tax

2.2.1 Tax Rate for Income Tax

2.2.2 Tax Rate for Commercial Tax

2.2.3 Tax Rate for Specific Goods

2.2.4 Tax Rate for Gemstones Tax

2.3 Other Taxes Rates to be Collected

viii. land revenue;

2.4 Reporting, Duty and Power of the Ministry Concerned

3.1 Tax Benefit of the Investment

3.1.1 Tax Benefit under Myanmar Investment Law

(i) For investments in sectors listed in a notification to be issued by the

Companies may be granted a wide range of benefits under Myanmar Investment

3.1.2 Tax benefit under Myanmar Special Economic Zone Law

3.1.3 Tax Benefit Under Myanmar Foreign Investment Law (MFIL)

3.2 Investment Benefit under Union Tax Law

3.3 Policy, Impacts and Restriction

ministries, may be obtained from the Directorate of Investment and Company

Type of Gemstones Tax Rate

Uncut jades 11%

Rubies, sapphires, and other uncut gemstones (except

Polished jades, rubies, sapphires, and other gemstones

Items made from gemstones 5%

Unassessed Income Declared in Kyat (K) Tax Rate Offered

From K 100,000,001to K 300,000,000 5%

From K 300,000,001 to K 1,000,000,000 10%

From K 1,000,000,001 to K 3,000,000,000 15%

3,000,000,001 and above 30%

Tax Rates Applicable to Various Kinds of Cigarettes

From K 601 to K 800 K 17 K 14

From K 801 to K 1,000 K 22 K 19

From K 1,001 and above K 25 K 21

Tax Rates Applicable to Various Kinds of Liquor

Price Range Tax Rate

From K 400 to K 1,000 per litre (L) K 170 per L

From K 1,001 to K 2,000 per L K 424 per L

From K 2,001 to K 3,000 per L K 707 per L

From K 3,001 to K 4000 per L K 990 per L

From K 4,001 to K 5,000 per L K 1,273 per L

From K 5,001 to K 6,000 per L K 1,555 per L

From K 6,001 to K 7,000 per L K 1,838 per L

From K 7,001 to K 8,000 per L K 2,121 per L

From K 8,001 to K 9,000 per L K 2,404 per L

From K 9,001 to K 10,000 per L K 2,686 per L