Tax Notes: Draft Union Tax Law 2018–2019

19
Sep
2018

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Authors: Jean Loi, Ngwe Lin Myat Chit

Due to the change in financial year, the end of the six-month gap period is approaching and the Union Parliament (“Pyidaungsu Hluttaw”) has announced a draft Union Tax Law 2018–2019 (“Draft UTL”) which will be effective from 1 October 2018. A few interesting points from the Draft UTL are outlined below:

Financial year end

Under the Draft UTL 2018–2019, the income year for state-owned enterprises remains the same from 1 October to 30 September the following year, as well as for other taxpayers from 1 April to 31 March the following year.

Specific Goods Tax

Major changes under Specific Goods Tax (“SGT”) include an increase in SGT rates for cigarettes, liquor, and cheroot — especially for goods which fall under a lower price tier. As an example, 1 liter of liquor with a sales value of MMK750 that used to be taxed at MMK90 per liter will now be taxed at MMK122 per liter. On the other hand, 1 liter of liquor with a sales value of MMK1,000 that used to be taxed at MMK274 per liter will now be taxed at MMK122 per liter. We also note that the price ranges for cigarettes and liquor have been expanded, along with the increase in corresponding SGT rates as per summary provided in table below. In addition, it should be noted that diamonds and emeralds are no longer subject to SGT.

TYPE OF SPECIFIC GOOD PRICE RANGES UNDER UTL 2018 PRICE RANGES UNDER DRAFT UTL 2018-2019 TAX RATE UNDER UTL 2018 TAX RATE UNDER DRAFT UTL 2018-2019
Cigarettes
  • MMK500 and below – MMK 901 and above per pack of 20 cigarettes
  • MMK600 and below – MMK 1,001 and above per pack of 20 cigarettes
  • MMK4 – MMK 16 per cigarette
  • MMK6 – MMK 21 per cigarette
Liquor
  • MMMK 750 and below – MMK 26,000 per liter
  • MMK 26,001 and above
  • MMMK 1,000 and below – MMK 29,000 per liter
  • MMK 29,001 and above
  • MMK 91 – MMK 5,911 per liter
  • 60% per liter
  • MMK 122– MMK 6,703 per liter
  • 60% per liter
Cheroot    
  • 25 Pyas per cheroot
  • MMK 1 per cheroot

Commercial Tax

Raw materials for producing detergents, soap, and raw soap are now exempted from Commercial Tax (“CT”), increasing the total CT exempt goods list from 86 to 87. However, 1% CT will also be charged on imported gold jewellery.

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