Aug 19, 2011

Corporate and individual income tax on earning in foreign exchange drops from 10% to 2%

Myanmar has reduced income tax for foreign exchange earning by private enterprises being implemented under a CMP system, according to a statement of the Union Ministry of Finance and Revenue announced by the state radio and television Thursday.

The income tax rate, cut from 10 percent to 2 percent, will be effective for six months starting from Aug. 19, 2011 to Feb. 18, 2012, the announcement said.

According to another order of the ministry, tax rate for Myanmar citizens living at home and abroad who earn foreign exchange with salary has also been reduced from 10 percent to 2 percent which is also effective from Aug. 19, 2011 to Feb. 18, 2012.

Earlier on Monday, Myanmar's union government had taken a measure of exempting commercial tax for exporters for a period of six months in a bid to boost export in face of depreciation of US dollar.

The exemption, which is effective from Aug. 15, 2011 to Feb. 14, 2012, covers seven export items of rice, beans and pulses, corn, sesame, rubber, freshwater and saltwater products and animal products (except prohibited ones).

The commercial tax's total exemption is a follow-up of its similar tax cut from 8 percent to 5 percent since July 1 at a time when depreciation of the value of U.S. dollar occurred, causing loss with exporters.

The export tax comprises commercial tax and 2-percent income tax and since the 5-percent commercial tax has been exempted, exporter has to pay only the 2-percent income tax now.

Source: Xinhua