Income tax debate delayed on exemptions talk

NAY PYI TAW — Negotiations over tax thresholds appear to be leading towards more amendments to the draft income tax law, after lawmakers suggested the proposed rates were too high to guarantee compliance.

Section 19 of the income tax bill, debated on Tuesday by a joint sitting of Union Parliament, appears to be a sticking point for MPs, with parliamentary speaker U Shwe Mann telling the floor that government revenues should take into account the living situations of taxpayers working in the civil service.

“Parliamentary committees should coordinate with government ministries, to fix the rate of income tax in a practical way,” he said. “This is the right way for the Union Parliament to use its last chance to do good in the interest of state employees.”

The bill will amend new income tax legislation enacted earlier in the current parliamentary term. U Saw Hla Tun, a USDP lawmaker for the Sagaing Region constituency of Chaung-U and the secretary of the Union Parliament Bill Committee, told Frontier that some exemptions should be included in the bill to ease the burden on civil servants with children or elderly relatives.

“According to rate of income tax in the bill, a director-general who earns K500,000 per month has to pay income tax of K60,000 per year, or K5,000 per month,” he said. “According to his status, his income may not be enough for his family, so he may not be willing to pay the tax. Exemptions should be made for civil servants for children of school age and for those whose parents live with them.”

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The draft law is expected to be approved by the current parliament, which will convene until January 29 before winning candidates from the November election take their seats in February.

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