Trapped in an economic mess of its own making, Myanmar’s military regime is seeking to recoup drops in revenue through new tax measures – with seemingly limited success so far.
By FRONTIER
Already faced with a crumbling economy and a rise in crime, Yangon’s nightlife entrepreneurs were recently delivered another piece of bad news, courtesy of the military regime.
Restaurant and bar owners in the commercial capital say that on August 25, the junta informed them they had 45 days to apply for a new licence for staged music and other forms of entertainment.
Licence-holders will be charged a regular fee, they said.
“They haven’t officially told us the exact rate yet, but the figure of K300,000 per month that we’ve been hearing seems probable,” said one restaurant owner.
That’s nearly US$150 at the exchange rate set by the Central Bank, but closer to $90 at the black market rate. Restaurants already must pay taxes on their business licenses and on liquor licenses, if they serve alcohol.
Last month’s notification also lists 39 requirements that nightlife venues must follow or risk being shut down. These include a specification for the height of the stage, soundproofing and parking lot regulations. The business owner is also responsible for supervising singers for unethical behaviour.
“Besides paying the tax, I would have to make renovations to my business to meet the new requirements,” said Ko Kyaw* another bar-restaurant owner in Yangon. “But I have to do it, because I’ve invested so much in this business that I can’t stop now. And if I got shut down, my employees would be in a lot of trouble.”
Ko Kyaw said business owners will have to weigh whether to pass the additional costs to the customer, particularly when so many consumers are struggling financially themselves.
“Customers already pay a service charge and a government tax. They wouldn’t like it if we raised prices because we have to pay more tax. Our restaurant doesn’t plan to do so, but under these circumstances, business isn’t going very well,” he said.
Ko Kyaw believes that the junta’s new measures are aimed both at collecting more revenue and taming the city’s nightlife, amid a reported surge in drug use and petty crime.
A similar order was issued by the regime’s Ministry of Commerce on July 21, demanding that anybody running an e-commerce business register within six months. Those who fail to do so will face action under section 5 of the Essential Supplies and Services Law, which can carry a prison sentence of six months to three years and a fine of up to K500,000.
The order said it was important to register these businesses in case a dispute arises with the customer, seemingly a reference to fraudulent activity. A follow-up statement on September 5 said business owners must pay taxes and be able to show sales data for the last three years.
The July 21 notification referred to registration fees and an online application charge, but like with the entertainment licence it did not give an exact figure. An official at the commerce ministry told Frontier on September 27 that the registration fee would vary depending on the products being sold, but would be waived until the end of the calendar year. The official, who asked not to be named, added that the application charge was “around K4,000”.
Since the COVID-19 pandemic, e-commerce has exploded in Myanmar, with goods including food, clothing, cosmetics, jewellery and even construction materials being sold mostly on Facebook.
“I think they just want to get taxes from online businesses, because some of them make a big income, like the jewellery sellers,” said Ma Win Maw, a Yangon resident who sells cosmetics online. “I believe the SAC’s main intention is to get more revenue rather than protecting consumers,” she added, referring to the junta by its official name, the State Administration Council.
Win Maw said she expects she will have to register eventually but is waiting as long as possible to avoid paying taxes in the meantime.
A woman who sells food online in Mandalay appealed for the regime not to tax e-commerce businesses yet, because many are still struggling to get by.
“E-commerce is just starting to develop in this country and we should not restrict or tax them yet. All business sectors are having a hard time because of the political situation and the military council should understand that,” she said.

Pressing needs
When the military overthrew the elected National League for Democracy government in February 2021, it precipitated a political and economic crisis. Mass peaceful protests were met with brutal crackdowns that then provoked an armed uprising. Anti-regime armed groups, broadly known as People’s Defence Forces, are generally loyal to the National Unity Government, a parallel administration appointed by lawmakers deposed in the coup.
Meanwhile, economic mismanagement coupled with domestic boycotts and Western sanctions have left the regime short on income. Included in these boycotts are refusals to pay taxes and other government fees – when possible.
“Even in major towns in this region, it’s very rare to see government tax collected,” said a restaurant owner in Pakokku, the largest city in Magway Region, where PDFs have a significant presence.
“After the coup, many customers who bitterly hate the military council don’t want to pay taxes at all. They ask not to get a receipt, so we don’t collect the tax,” he said of his restaurant.
Sources of state revenue include income tax, commercial tax, special goods tax, stamp tax and 30 percent of the proceeds from the state-run Aung Bar Lay lottery. However, the junta’s own figures reveal that tax collection plummeted after the coup.
During the 2019-2020 fiscal year, the NLD government received K3.5 trillion in income tax, K2.2 trillion in commercial tax, K1.2 trillion in special goods tax, K110 billion in stamp tax, and K160 billion in Aung Bar Lay lottery proceeds.
The following fiscal year, which started just four months before the military takeover, only K2 trillion was collected in income tax, K1.6 trillion in commercial tax, K800 billion in special goods tax, K80 billion in stamp tax and K85 billion from the state lottery.
While some of the boycotts have waned since the first year, the regime’s Ministry of Planning and Finance has not released subsequent figures, and its recent measures suggest it is still struggling to make up for a shortfall in tax.
On the same day it notified bar owners in Yangon of the new licensing requirement, the regime announced that healthcare workers at private hospitals and clinics would have to pay a new 2pc income tax, starting on September 1. However, industry sources say despite the deadline passing, the new policy isn’t being enforced yet.
“I heard from the news that the tax would be collected, but on the ground, I haven’t seen any changes,” said a doctor at a private hospital in Yangon.
A striking healthcare worker in Mandalay warned that if the military follows through with this plan, it could increase the cost of treatment, ultimately hurting patients.
The public healthcare system has been in disarray since tens of thousands of health workers walked out of their government jobs to protest the coup. Before the military takeover, many of those workers moonlit at private hospitals, which are now forbidden from hiring striking government workers, undermining the private sector at a time when people are increasingly relying on it.
Increased expenses could undermine it further because, for many, private healthcare is already very costly.
“Even before this tax, private hospitals were expensive,” said a woman from Zabuthiri Township in Nay Pyi Taw, whose husband sought treatment for diabetes, kidney disease and chronic back pain at a private hospital two months ago.
“He needed medical treatment for six days and saw three different specialists. It cost K1.8 million,” she said.
She admitted her family is lucky to be able to afford private healthcare but worries about mounting costs if the tax is implemented.
“Since the coup, public hospitals haven’t had enough medical personnel or medicine,” she added, meaning this left her with little choice but to go private. “Increasing the tax will add to the patient’s bill [at private hospitals], but if it’s a serious health problem, you have to pay what they ask.”

Meanwhile, workers with far lower salaries than doctors are facing an increased tax burden. The junta amended the 2023 Union Tax Law earlier this month to introduce a new levy on migrant worker salaries. From October 1, migrants earning under K10 million a year must pay a tax of 5pc of their income, with progressively higher rates for those earning more, up to 25pc for salaries of over K70 million.
This follows a requirement that, starting this month, workers who migrate under formal labour agreements between Myanmar and other countries must transfer 25pc of their salaries back to Myanmar through the banking system. Banks charge much less favourable exchange rates than the informal hundi system favoured by most migrants, resulting in a loss for workers on already meagre salaries. This, combined with the new migrant income tax, could push more workers to migrate illegally, exposing them to greater exploitation.
Defending hard assets
After the coup, the kyat lost nearly half its value against the dollar, with many choosing to offload their increasingly worthless cash in exchange for hard assets like property and vehicles. The regime is trying to extract some income from these transactions by sweetening an existing tax amnesty scheme.
When buying property or automobiles, buyers must pay with “white money” – meaning income they have paid taxes on – to get legal title. However, most income in Myanmar is undeclared and untaxed, and therefore “black”.
This legal stumbling block grants some leverage to tax authorities. Since well before the coup, they have offered amnesties to lure some of this black money into the state coffers. Under these schemes, people pay a special rate of tax and a penalty on previously undeclared income, to turn the money white and make it fit for property purchases.
The NLD government set taxes on black money at 6pc for K1-100 million, 10pc at K100-300 million, 20pc for K300 million-3 billion and 30pc for anything over K3 billion. The junta is lowering these rates to 3pc for K1-300 million, 5pc for K300-600 million, 10pc for K600 million-1 billion and 15pc for K1-3 billion, while still charging 30pc for anything over K3 billion.
The regime seemingly hopes members of the public will take advantage of these discounted rates to officially launder their black money before buying houses or cars. However, a real estate agent in Nay Pyi Taw said there are loopholes to exploit.
“In real estate, both now and in the past, very few people pay taxes. When they make a sale, most buyers don’t go to the level of changing the ownership deed, but merely use a property permit. You only have to pay the government tax if you want to change the name on the deed,” he explained, referring to the tax paid in the amnesty schemes.
Meanwhile, an agent who helps car owners register their vehicles told Frontier the Road Transport Administration Department is planning to increase its fees. Currently, it costs K5,000 to register a motorcycle and K20,000 to register a car.
“The new rates haven’t been officially announced yet,” said the agent, who works in Nay Pyi Taw.
The military’s renewed tax push has predictably sparked a backlash from resistance forces. On September 11, a group called the No More Dictatorship PDF attacked an Internal Revenue Department office with grenades in Mandalay’s Chan Mya Tharzi Township. In a statement, the NUG-affiliated group blamed the regime’s plans to increase vehicle registration fees. It’s not clear if there were any deaths or injuries.
“The terrorist military has been torturing people and causing suffering from the coup until today. The military is also causing problems for people by confiscating and destroying their houses and collecting taxes,” the statement said.
The PDF’s leader Naga Gyi told Frontier the group will “do what needs to be done” to “clear” tax collectors who oppress the people, using a common euphemism for assassinations.
“If we’re going to clear someone, we thoroughly investigate them first. We don’t clear staff who are working normally. We only consider clearing the staff who are causing a lot of problems for the people,” he said.
But asked about the seemingly indiscriminate nature of the grenade attack on the IRD office, he said the attack was necessary and the PDF “is not responsible” for any collateral damage.
Despite the NUG having a military code of conduct that forbids the killing of civilians, targeting tax collectors appears to have the approval of its Ministry of Defence
“Revolutionary forces must follow military ethics,” said defence ministry spokesperson U Maung Maung Swe. “The NMD-PDF attack on the tax office was also an attack on one of the SAC’s mechanisms, so it was carried out in accordance with the will of the people.”
*indicates use of pseudonym for security reasons
Update, September 27: This article includes an update from a regime commerce ministry official about the registration fee charged to online vendors.