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- 2 Sep 2020
The Pyidaungsu Hluttaw approved the 2020Union Taxation Law (“UTL 2020”) on 28 August 2020 and when enacted, will be applicable for financial year (FY) 2020-2021 i.e. 1 October 2020 to 30 September 2021.
We set out the major changes proposed under the UTL 2020 as compared to the Union Taxation Law2019 (“UTL 2019”).
- Income Tax (IT)
Under the UTL 2020, the personal income tax rates, corporate income tax rates as well as capital gains tax rates are the same as for the previous year.
In accordance with Section 25 Subsection (a) of the UTL 2019, the tax rates applicable to the undisclosed source of income range from 3% to 30% (as shown in the table)
| Sr No | Income | MMK | Income Tax Rate |
| From | To | ||
| 1 | 1 | 100,000,000 | 3% |
| 2 | 100,000,001 | 300,000,000 | 5% |
| 3 | 300,000,001 | 1,000,000,000 | 10% |
| 4 | 1,000,000,001 | 3,000,000,000 | 15% |
| 5 | 3,000,000,001and | above | 30% |
Under the UTL 2020, the tax rates applicable to the undisclosed source of income are proposed to increase from 3% – 30% to 6% – 30% as shown in the table below.
| Sr No | Income | MMK | Income Tax Rate |
| From | To | ||
| 1 | 1 | 100,000,000 | 6% |
| 2 | 100,000,001 | 300,000,000 | 10% |
| 3 | 300,000,001 | 3,000,000,000 | 20% |
| 4 | 3,000,000,001 and | above | 30% |
The UTL 2020 is enacted in the current form, the tax rates shall be applicable and effective for the financial year starting from 1 October 2020 to 30 September 2021.
- 2. Commercial Tax (“CT”)
There are no major changes for CT under the UTL 2020. Except for the following goods and services being CT exempted, the other goods and services are the same as the UTL 2019:
- Goods
As per the UTL 2020, CT is exempted on soymilk, however, other non-dairy products and creamers are subject to CT. Further, under the draft UTL 2020, goods purchased locally or imported under the name of the UN organisations are exempted. There is also a new section included in the UTL 2020, Section 14 Subsection (h) which states that the CT exempted for the goods that were imported through temporary admission or drawback system in accordance with the customs procedures shall be paid if the goods remain in usage without being exported at the due time.
- Services
As per the UTL 2020, services procured locally under the name of the UN organisations that are residents in the Union are CT exempted. Transportation services by an aircraft for a fee to the passengers for local or foreign trips are also exempted from CT.
Please refer to Appendix 1 for the list of goods and services exempted from CT proposed under the UTL 2020. Goods & Services exempted from CT (appendix 1)
- Specific Goods Tax (“SGT”)
In accordance with Section 11 Subsection (a) of the UTL 2020, the SGT rates on the following goods have been changed as compared to the UTL 2019:
- Cigarette
SGT on per unit of cigarette has been proposed to be increased by MMK 1 as stated below, however, the value tiers and the bandwidth remain the same:
| Value tier (Same for both UTLs) | UTL | 2019 | UTL | 2020 |
| Bandwidth | SGT per unit | Bandwidth | SGT per unit | |
| Up to MMK 600 | 600 | 8 | 600 | 9 |
| MMK 601-801 | 200 | 17 | 200 | 18 |
| MMK 801-1000 | 200 | 22 | 200 | 23 |
| MMK 1,001 & above | – | 25 | – | 26 |
- Cheroot
SGT rate on cheroots has been proposed to be increased from MMK 0.75 per stick under UTL 2019 to MMK 1 per stick under the draft UTL 2020.
- Alcohol
Under the UTL 2020, the SGT rates on alcohol have been proposed to be increased by 6%, however, the value tiers remain unchanged, and the bandwidth of each tier continues to be restricted at MMK 1,000, under the UTL 2020, the details are set out below:
| UTL 2019 | UTL 2020 | ||||
| Value | Bandwidth | SGT per unit | Value | Bandwidth | SGT per unit |
| 400-1000 | 600 | 170 | 300-1000 | 700 | 180 |
| 1,001-2,000 | 1,000 | 424 | 1,001-2,000 | 1,000 | 449 |
| 2,001-3,000 | 1,000 | 707 | 2,001-3,000 | 1,000 | 749 |
| 3,001-4,000 | 1,000 | 990 | 3,001-4,000 | 1,000 | 1,049 |
| 4,001-5,000 | 1,000 | 1,273 | 4,001-5,000 | 1,000 | 1,349 |
| 5,001-6,000 | 1,000 | 1,555 | 5,001-6,000 | 1,000 | 1,648 |
| 6,001-7,000 | 1,000 | 1,838 | 6,001-7,000 | 1,000 | 1,948 |
| 7,001-8,000 | 1,000 | 2,121 | 7,001-8,000 | 1,000 | 2,248 |
| 8,001-9,000 | 1,000 | 2,404 | 8,001-9,000 | 1,000 | 2,548 |
| 9,001-10,000 | 1,000 | 2,686 | 9,001-10,000 | 1,000 | 2,847 |
| 10,001-11,000 | 1,000 | 2,969 | 10,001-11,000 | 1,000 | 3,147 |
| 11,001-12,000 | 1,000 | 3,252 | 11,001-12,000 | 1,000 | 3,447 |
| 12,001-13,000 | 1,000 | 3,535 | 12,001-13,000 | 1,000 | 3,747 |
| 13,001-14,000 | 1,000 | 3,817 | 13,001-14,000 | 1,000 | 4,046 |
| 14,001-15,000 | 1,000 | 4,100 | 14,001-15,000 | 1,000 | 4,346 |
| 15,001 & above | – | 60% | 15,001 & above | 1,000 | 60% |
- Wine
Under the UTL 2020, the SGT rates on different kinds of wines have been increased, however, the value tiers and the bandwidth remain unchanged under the UTL 2020, the details whereof are set out below:
| Value tier | UTL | 2019 | UTL | 2020 |
| (Same for both UTLs) | Bandwidth | SGT per unit | Bandwidth | SGT per unit |
| 750 | – | 81 | – | 87 |
| 751-1,500 | 750 | 244 | 750 | 264 |
| 1,501-2,250 | 750 | 406 | 750 | 438 |
| 2,251-3,000 | 750 | 569 | 750 | 615 |
| 3,001-3,750 | 750 | 732 | 750 | 791 |
| 3,751-4,500 | 750 | 894 | 750 | 966 |
| 4,501-6,000 | 1,500 | 1,138 | 1,500 | 1,229 |
| 6,001-7,500 | 1,500 | 1,463 | 1,500 | 1,580 |
| 7,501-9,000 | 1,500 | 1,788 | 1,500 | 1,931 |
| 9,001-10,500 | 1,500 | 2,113 | 1,500 | 2,282 |
| 10,501-13,500 | 3,000 | 2,600 | 3,000 | 2,808 |
| 13,501-16,500 | 3,000 | 3,250 | 3,000 | 3,510 |
| 16,501 & above | – | 50% | 50% |
Please refer to Appendix 2 for the list of specific goods and the SGT rates proposed under the UTL 2020.Specific Goods Tax (appendix 2)