Lo­cal re­tail­ers ask gov­ern­ment for greater clar­ity over tax pol­icy

The Myanmar Times - - Business - My­at­noeoo@mm­times.com MYAT NOE OO

ANX­I­ETY is mount­ing within the re­tail in­dus­try with busi­nesses large and small in the dark about how rules gov­ern­ing tax­a­tion will af­fect their fu­ture trade.

Speak­ing at work­shop hosted by the Myan­mar Re­tail­ers As­so­ci­a­tion in Yan­gon on Au­gust 19, Daw Wai Thit Lwin, man­ag­ing di­rec­tor at ABC, one of Myan­mar’s largest con­ve­nience store chains, voiced con­cerns over a lack of clar­ity given to busi­nesses dur­ing the pe­riod of gov­ern­ment tran­si­tion.

She said larger, more mod­ern out­fits such as ABC feared that an un­fair play­ing field could eas­ily un­fold, if the new rules did not ap­ply equally to smaller mum-and-pop stores sell­ing sim­i­lar prod­ucts.

“The rules for tax­a­tion are not clear, so our re­tail sell­ers re­quest that the laws and reg­u­la­tions around tax be cleared up, and that tax­a­tion is fair,” she said.

Stores that have mod­ern IT sys­tems to prop­erly record trans­ac­tions could be at a dis­ad­van­tage to smaller shops without the tech­nol­ogy up­grades, who could fall through the gaps and get away with in­ac­cu­ra­cies and thus pay less tax, she added.

Daw Wai Thit Lwin said price in­creases would be passed on to con­sumers, mak­ing it dif­fi­cult for those with ac­cu­rate book­keep­ing to com­pete.

Last month the gov­ern­ment un­veiled its long-awaited eco­nomic pol­icy, which pledged to stream­line the tax sys­tem and boost state cof­fers. But de­tails are yet to be clar­i­fied, lead­ing many in a ner­vous busi­ness community to spec­u­late on what their fu­ture fi­nan­cials might look like.

A call to the tax de­part­ment in Nay Pyi Taw yes­ter­day failed to shed any fur­ther light.

A tax of­fi­cial, who de­clined to give his name, said there were two kinds of taxes: com­mer­cial tax paid by con­sumers and in­come tax paid by busi­nesses. He de­clined to pro­vide any fur­ther de­tail.

Ac­cord­ing to U Myo Min Aung, vice pres­i­dent of the Myan­mar Re­tail­ers As­so­ci­a­tion, busi­nesses are will­ing to con­trib­ute their share of taxes un­der the new regime, but it must be fair and pre­dictable.

“It’s the same in the re­tail sec­tor as it is with restau­rants. In a restau­rant, they can pass the tax cost on to the con­sumer. For a shop, if there is a tax placed on some­thing like a bot­tle of wa­ter, then the price of that bot­tle for con­sumers will go up,” he said yes­ter­day.

U Myo Min Aung said busi­nesses needed cer­tainty, with a pro­gres­sive tax regime that al­lows firms to plan years in ad­vance. He said the gov­ern­ment needed to en­gage the pri­vate sec­tor more in or­der to quell nerves and help de­velop its tax strat­egy.

Speak­ing at the re­tailer’s con­fer­ence, U Myint Zaw, chair of Wise College, an in­ter­na­tional school that spe­cialises in busi­ness, said that both the pub­lic and busi­ness had some­thing to gain from in­creases in gov­ern­ment spend­ing as a re­sult of higher tax rev­enue.

Echo­ing the sen­ti­ments of fel­low busi­ness in­sid­ers at the con­fer­ence, U Myint Zaw said the gov­ern­ment needed to build con­fi­dence by show­ing com­pa­nies how they would ben­e­fit from pay­ing their dues, say­ing the state needed to step up its tax ed­u­ca­tion ef­forts.

But mem­bers of the re­tail as­so­ci­a­tion are merely the tip of the ice­berg for a coun­try with thou­sands of smaller traders, who re­main un­aware of their tax obli­ga­tions.

“I opened a small shop, so I think it’s not a con­cern for me,” said Daw Than Than Oo, sell­ing snacks and juice in South Okkalapa town­ship. “The store that opens 24 hours is big busi­ness and I only trade for a daily in­come,” she said.

Photo: Staff

Peo­ple wait out­side the In­ter­nal Rev­enue build­ing in down­town Yan­gon.

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