The excise tax regulating consumption is being removed from the Commercial Tax Law and is being presented to Parliament as a new tax law, known as the Special Commodity Tax Law. The old Commercial Tax Law will subsequently remain in force and will be administered only as a value-added tax/goods and services tax, which will be applied to the national tax base at a uniform tax rate.
Myanmar has also been marching towards the implementation of a self-assessment system for income tax assessments and, as a forerunner, the Large Taxpayers’ Office has been established to assist large taxpayers in complying with the new requirements. Likewise, Middle Taxpayers’ Offices have also been formed, encouraging second-tier taxpayers to comply with tax laws. Given these developments, the role of public accountants is becoming more important because, as is usual in all countries, they have to assist taxpayers in the preparation of their financial statements and the reconciliation of accounting profits and taxable income. However, the primary responsibility of this preparation lies with company management.
In anticipation of social and economic reforms, the regulatory body for the accountancy profession in Myanmar – the Myanmar Accountancy Council (MAC) – has, in 2009 and 2010, updated and/or adopted all international accounting and auditing standards by renaming them as Myanmar standards. As a policy, MAC will upgrade the local standards within one year of the date of any changes taking place at the international level. MAC also encourages early adoption of international standards even before the official local adoption is made.
The Myanmar Institute of Certified Accountants (MICPA), the national accountancy body and professional accountancy organisation, is striving its best to train its member accountants by way of continuing professional development through seminars and workshops. However, although the authorities – such as the Internal Revenue Department (IRD), the Tax Authority and the Central Bank of Myanmar (CBM) – require robust, reliable financial statements, the local banks and business community at large are still weak at enforcement.
International organisations, such as the World Bank and the IMF, are giving various types of assistance to the MICPA. However, we feel that the stakeholders themselves need to have the will to comply with the new standards, along with strict regulatory oversight. The IRD and the CBM should also be thorough with these standards, so that they avoid unnecessary burdens placed upon the respective stakeholders during the administration of their conservative prudential regulations.
On the other hand, great efforts are being made in different ways to support small and medium-sized enterprises (SMEs), which constitute over 90% of the economy. These include liberal loans without the need to provide collateral, tax exemptions and less stringent corporate compliance requirements. Proposed amendments to the Myanmar Companies Act include certain exemptions and waivers for SMEs, such as audit exemptions and lower requirements for holding directors’ meetings and shareholders’ meetings. All these exemptions and waivers should be supplemented by the proper training, to promote a law-abiding spirit and accountability. If such burden-relieving incentives are deemed necessary, these should be implemented through the reduction of penalties rather than by reducing companies’ primary accountability duties.
In addition to the above, there are some additional minor commercial issues to be clarified. These include whether free accommodation counts as income, how to assess Myanmar-sourced income for foreign residents, and how the Stamp Act treats advances and deposits for rental properties.
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