IMF Urges Myanmar To Broaden Tax Base

by Mary Swire, Tax-News.com, Hong Kong

22 September 2015

The International Monetary Fund (IMF) has recommended a number of measures to help Myanmar reduce its fiscal deficit.

In its 2015 Article IV consultation report for Myanmar, the IMF advised the Government to cut the fiscal deficit to 4.5 percent of gross domestic product (GDP) in the medium term. It said that this target can be achieved through a combination of revenue-raising measures and expenditure cuts in the upcoming 2015/16 Budget, expected in the coming months.

Tax revenue has increased significantly over the last three years, but it is still well below levels in most peer countries because of a narrow tax base, which is exacerbated by extensive tax incentives and weak administration, the Fund said.

The report said that preparatory work on the introduction of a value-added tax (VAT) by 2020/21 should begin in earnest. In addition, it said that the extractive industry fiscal regime should be reformed with a view to centralizing the collection of gas-related revenue and increasing transparency.

The IMF welcomed the operation of the Large Taxpayers Office with the introduction of self-assessment on income taxes. However, it said that further improvements to tax administration are needed.

Last, the IMF urged authorities to collect the commercial tax on telecom services, which was postponed earlier this year.

TAGS: tax | economics | value added tax (VAT) | Burma | tax incentives | fiscal policy | revenue guidance | gross domestic product (GDP) | budget | International Monetary Fund (IMF) | tax reform | services | Tax

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