Union Tax Law 2017

The Union Tax Law 2017 will commence operation on 1 April 2017. There are some significant changes relating to the special commodities tax and commercial tax. There are no significant changes to income tax.

Special Commodities Tax

In relation to the special commodities tax there are some changes in the rate of the tax.

For importing and manufacturing, the most significant rate changes relate to:

• Cigarettes (an extra 1 kyat per cigarette)
• cigars, pipe tobacco and betel (an extra 20%, now 80% tax)
• Significant increases in tax on liquor and wine (but not beer which remains at 60%)
• wood logs have reduced from 20% to 5%
• reductions in uncut gems
• For exporting, the special commodities tax will reduce for wood logs (from 50% to 10%) and uncut gems (from 20% to 15% for jade and 20% to 10% for other gemstones).

Commercial Tax

In relation to commercial tax there are several changes, including the threshold amount of the commercial tax exemption and the number of commercial tax exempted goods and services.

There are 87 categories of goods of commercial tax exempted. They have removed raw material to make soap powder and value added products based on fish/prawn fishery products. However, they have added to the exemption list goods which are imported under the temporary admission system or draw back system.

In respect of services, there are 29 categories which are not subject to commercial tax. The 2017 list does not include “employment agency services”. There are two new business activities which are not subject to commercial tax, which are, the Aung Bar Lay (Lottery) services and industrial agricultural services.

In addition, the threshold amount of the commercial tax exemption has increased from 20 million kyat to 50 million kyat. Also, there is a new exemption, for “de minimis” value of goods shipped or collected, as determined by the customs department.

Income Tax

There are no significant changes in the income tax section. Therefore, the rate from 2016 will still apply. Consequently, corporate income tax will be imposed at 25%. Personal income tax will be imposed with a progressive rate starting from 0% to 25%. Capital gains tax will be imposed at 10% or (in the case of oil and gas sector) 40% - 50%.

Individual Tax/ Personal income tax

• Individuals earning up to MMK4,800,000 are now exempt from tax

No.	Layers of Income		Income Tax Rate
	From	To
	Kyats	Kyats
(1)	1	2,000,000	0%
(2)	2,000,001	5,000,000	5%
(3)	5,000,001	10,000,000	10%
(4)	10,000,001	20,000,000	15%
(5)	20,000,001	30,000,000	20%
(6)	30,000,001 and above		25%