RANGOON—Hundreds of businesspeople in Burma’s biggest city have called
on lawmakers to reform the country’s tax system, criticizing poor
enforcement and a lack of accountability that has allowed more than half
of taxpayers, including many wealthy cronies, to avoid paying their
dues.
At a public hearing in Rangoon on Tuesday, the businesspeople made
their complaints before major lawmakers including opposition leader Aung
San Suu Kyi and Shwe Mann, speaker of Parliament’s Lower House.
“We have to pay a lot [of taxes], but 70 percent [of Burmese people]
don’t pay taxes,” said one businessman from the Myanmar Petroleum Trade
Association, citing 2012 statistics from the Ministry of Finance and
Revenue.
With the current broken tax system, he added, Burma’s businesses will
likely struggle to compete with their counterparts in the region,
especially as Southeast Asian countries aim to establish a free trade
area by 2015.
Shwe Mann said the government did not condone tax evasion and that
nobody was above the law, but acknowledged that the country was still in
a process of ongoing reform.
“Our government does not allow these people [to evade their taxes]
officially,” he said at the forum, hosted at the headquarters of the
Union of Myanmar Federation of Chambers of Commerce and Industry. “If
you know of someone who avoided paying taxes, you should present the
case to Parliament and we will take action.”
Suu Kyi said the government had a responsibility to ensure the taxation system did not give unfair advantages to the wealthy.
“When we set up the taxation system in this country, it was for the
benefit of the people, and the public should be aware of that,” she
said. “The government has a duty to raise awareness. It should consider
both sides when taking taxes from the people.”
Some of Burma’s biggest tycoons are conspicuously absent from a list
of top-paying taxpayers released by the country’s Internal Revenue
Department (IRD) last year.
The list of 100 companies which paid the most in commercial and
income taxes in the last fiscal year showed that relatively small
companies were the most heavily taxed, while huge conglomerations run by
cronies of former ruling generals bore hardly any tax burden.
Tobacco and alcohol companies, along with a mix of other businesses
in a range of industries from mining to tourism and banking, were among
the biggest taxpayers.
Myanmar Brewery, a Burmese-Singaporean joint-venture company, topped
the list for both income and commercial taxes in the fiscal year ending
on March 2012, while other partly foreign-owned companies, including
Myanmar CP Livestock, an affiliate of Thailand’s Charoen Pokphand Group,
were also among the top taxpayers.
Noticeably missing from the list of major earners were some of
Burma’s biggest corporations, including the Htoo Group of Companies
owned by Tay Za, a Burmese business tycoon with close ties to former
dictator Sr-Gen Than Shwe.
Tay Za has long been accused by the Burmese public of evading his tax
obligations, but the tycoon has never been formally charged. He owns a
large network of businesses, and it was unclear whether he controlled
some of the smaller, lesser-known companies that were among the
country’s major taxpayers.
Also absent from the IRD’s list was Asia World, Burma’s largest and
most diversified conglomerate, which was founded by former drug lord Lo
Hsing Han and run by his son, Steven Law.
The military-owned Union of Myanmar Economic Holdings, a partner in
many joint ventures, was also missing, as were most companies associated
with the Union of Myanmar Federation of Chambers of Commerce and
Industry.
Two companies that did make the IRD list, despite their connections
to senior military figures, were Kanbawza Bank, part of the Myanmar
Billion Group founded by Aung Ko Win (aka Saya Kyaung), and Max Myanmar
Construction, part of the Max Myanmar Group of Companies owned by Zaw
Zaw.
These rare exceptions did not, however, mask the fact that some
businesses appeared to enjoy exemptions from taxation, thanks largely to
their privileged ties to Burma’s former ruling generals.
Some critics say the problem stems from a history of lax enforcement of tax laws.
“It seems that those who were able to avoid paying taxes in the past
are still able to do so,” Han Tun, a former IRD official who now writes
about tax-related issues, told The Irrawaddy in an interview last year.
He noted that under Burma’s military-drafted 2008 Constitution, companies were required to pay taxes on their earnings.
“The trouble is that enforcement is still very weak, despite the new rules,” he added.
source: The Irrawaddy
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