
Knowledge Highlights 11 May 2022
Knowledge Highlights 21 October 2019
On 24 September 2019, the Myanmar government issued a new Union Tax Law (“UTL 2019”) for the new financial year commencing on 1 October 2019.
The UTL 2019 reduces the progressive rates for “tax on unassessed income”, also known as “black money tax”, in what is essentially a conditional tax amnesty. The tax on unassessed income effectively operates as a penalty on citizens who evade income tax on their earnings and, in practice, when these citizens transfer material property (such as automobiles, houses, apartments) or pay share capital contributions, the government imposes a tax on the transaction value if there is evidence that income tax payable has been not paid on the consideration received or paid.
The new tax rates under the UTL 2019 for unassessed income are as follows:
Under the previous Union Tax Law 2018, the tax rates for unassessed income was as follows:
Section 25(c) of the UTL 2019 emphasises that this reduction will only apply from 1 October 2019 to 30 September 2020. By applying this tax amnesty, the government aims to incentivise citizens to pay tax on hidden earnings at a lower “cost”, and to recover and collect more tax revenue within the foregoing period.
The new tax rates significantly reduce income tax liability for those with unassessed income of not more than three billion MMK. To illustrate, previously, tax of 888,500,000 MMK would be payable where a person intends to invest three billion MMK (on which income tax has never been paid). He would now only be required to pay tax of 383,000,000 MMK, a saving of 505,500,000 MMK.
The UTL 2019 also makes the following amendments to the Union Tax Law 2018: