Monday, August 21, 2017

Parliament suspends 5% tax on top-up

The Union Parliament yesterday suspended a newly imposed 5 percent commercial tax on mobile phone top-ups until the next fiscal year.

Many mobile phone users had come out against the tax. Photo: Aung Htay Hlaing / The Myanmar TimesMany mobile phone users had come out against the tax. Photo: Aung Htay Hlaing / The Myanmar Times

The proposal was approved following a long debate between members of parliament and ministers during a May 27 parliamentary session.

The move follows a groundswell of opposition to the tax, announced at a May 18 event in Nay Pyi Taw by the Ministry of Communications and Information Technology (MCIT). It said the 5pc tax on telecoms services would be collected from June 1, ending what it said was an exemption granted to the industry.

However, on May 21, U Thein Tun Oo, a member of parliament from Mandalay Region’s Amarapura constituency, put an urgent proposal to the Pyidaungsu Hluttaw, saying that the tax should be suspended for a year.

Six MPs backed his proposal and pointed out that the ministry should not collect tax until they are providing a proper service to the mobile user.

“People are now using MPT, Telenor and Ooredoo SIM cards, but these do not work in rural and remote areas, and they cannot provide a sufficient service to customers. I want them to collect tax, but only if they can provide an adequate service,” said U Tin Maung Win from the Mingalardon constituency in Yangon Region.

U Aye from Homalin constituency in Sagaing Region said 50pc of the 28 million mobile users around the nation are poor. “They are now happy because they can use a mobile. If the government collects tax without any proper warning, they could become irritated,” he said.

He suggested that the government should not collect tax this year, and that if it intends to collect tax at a later stage, it should not begin with 5pc, but should introduce it at 1pc or 2pc.

U Thaung Tin, deputy minister of the Ministry of Communications and Information Technology, said that many things still need to be implemented in order to provide a quality service, and that the tax was aimed at helping to provide such a service.

Union Minister for Finance U Win Shein said that other countries collect an indirect mobile tax of between 6pc and 20pc. “In Myanmar we planned to collect only 5pc,” he said.

Currently, 28 million people in Myanmar are using mobile phones. The average spend per person per month is K5000. If parliament collects a tax of 5pc, the government will receive K84 billion per year. Government taxes are used to help the development of the country.

“That’s why I would like to ask that you cooperate with us for the long-term benefit,” U Win Shein said.

However, Pyidaungsu Hluttaw Speaker Thura U Shwe Mann agreed with the MPs and said that the government should suspend the tax. When he urged parliament to make a decision, all MPs agreed to suspend the 5pc top-up tax.