Tobacco Taxation in Myanmar MYANMAR TAX SYSTEM REFORM Tobacco Taxation in Myanmar The Republic of the Union of Myanmar Ministry of Planning and Finance Internal Revenue Department Khin Yamon Aung Director, IRD, Ministry of Planning and Finance Tobacco Taxation , Washinton DC,18-19 April, 2017

The Republic of the Union of Myanmar D M S E B Y O F G L KACHIN STATE CHIN STATE SHAN STATE KAYA STATE K I T SAGAING DIV ISION MAGWAY DIVISION BAGO YANGON V R W H CHINA LAOS THAILAND INDIA BANGLADAHS The Republic of the Union of Myanmar The Land The largest country on the main land of South East Asia Capital : Nay Pyi Taw Total land area 676,577 sq. km (216,228 sq. miles) Total coastal line 2,832 km Neighboring countries: Bangladesh, India, China, Laos, Thailand Population 51 millions Religion Buddhism (89.3%), Christians (5.6%), Islam (3.8%), Hindus (0.5%), Animism (0.5%)

Reform Program Reform Program commenced in 2012 with an IMF Mission. This set out a very ambitious reform agenda. Now Myanmar is on the way of 2nd phase of reform journey. Along the first phase reform program, Specific Goods Tax (SGT) introduced in 2016. Before 2016, Myanmar didn’t levy specific tax for tobacco products but levy Commercial Tax and Income Tax

During that time, the cigarette was charged at 100%, And other tobacco products including Cheroot were charged at 50%. Myanmar introduced a Specific Goods Tax (SGT), effected from 1st April 2016. SGT is imposed on Importation of Specific goods into Myanmar, production of specific goods in the country and exportation of specific goods abroad.

importers, producers and exporters of specific goods are subject to paying SGT. There are 17 types of specific goods including all sort of tobacco products. (Cigarettes, Tobacco leave, Virginia tobacco, cured, Cheroot, Cigars, pipe tobacco and Betel quid preparations) SGT rates are published in the Union Tax Law approved by the Union Parliament.

Mixing specific and ad valorem rates are applied Tobacco and Virginia tobacco are taxed at 60 %, Cigars, Pipe Tobacco and Betel quid preparation are charged at 80%. all types of cigarettes are charged SGT based on the price range. There are 4 tiers, The highest tier is 16 Kyats per stick for the ex-factory price 800 kyats and above per pack. 25 cents per pack.

tax collection increased significantly. In Fiscal Year 2015-16, 16 billion kyats. In 2016-17, increased to 48 billion kyats. 300% increased. IRD plans to reduce tiers for Cigarette under SGT. Applying Single tier is not possible due to enforcement constraint. gradual reduction of tiers is under consideration.

Cheroot in Myanmar

Cheroot, to apply a mix type of specific and ad valorem system. Smoking Cheroot is above 50 % of smoking volume. Traditionally, rural people prefer to Cheroot than Cigarette. Starting from 2017, Cheroot is subject to SGT 0.5 Kyat and 1 Kyat per stick based on the price.

In conclusion tax stamp system on Cigarette as a production control measure. Like Cigarette, Cheroot will be use tax stamp in future Myanmar is trying to reduce the smoking and consumption of Tobacco product with the collaboration with Ministry of Health and other ministries enforcement of Tobacco Control Law 2006 Specific Goods Tax Law 2016.

Thank you for your attention Ministry of Planning and Finance The Republic of the Union of Myanmar