Commercial and income tax would be collected from Myanmar gems and jewellery entrepreneurs under the newly-enacted Union Tax Law 2015, a top government official said.
U Min Htut, director general of Internal Revenue Department (IRD), said, “Gem companies did not need to pay income tax last year. Under the new 2015 tax law, income tax rates have been reduced across the board, but applied to more industries.
Commercial tax now shall be paid regardless of whether transactions are done in foreign currency or local, according to section 36 of the new law. According to Income Tax Law, gem companies will also have to pay income tax on their profit.
The firms have to pay 15 percent commercial tax on raw material and 10 percent on finished gems, for a total 25 percent of commercial tax, in addition to a 25 percent income tax on profit.
“According to discussions in parliament, private companies excavated only a few gems, while public-private joint ventures excavated the lion’s share. Therefore tax is reduced to prevent losses to private entrepreneurs,” U Min Htut said.
He said entrepreneurs will not be subject to income tax. “For example, for joint ventures which are 40 percent publicly owned and 60 percent privately owned, taxes will be reduced for the parts which are publicly owned.”
According to 1995 Gems Law, a 30 percent commercial tax for the export of raw gem stone and 10 percent commercial tax for the export of finished gems product are collected. However, if the raw gem stones are sold domestically in Myanmar Kyat, no tax is collected.