Local retailers ask government for greater clarity over tax policy
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.
People wait outside the Internal Revenue building in downtown Yangon.