A one percent commercial tax on jewelry purchases — which started on June 1 of this year — has reached approximately K2.62 billion in four months. Jewerly sellers income tax reached K209 million, said U Min Htut, Director of Internal Revenue Department (IRD).
A little over K1.38 billion out of the K2.6 billion in commercial tax is from the Yangon Region alone, which is the highest collected in the country. The total collected tax is primarly from the larger cities, but the government is trying to expand the one percent commercial tax to smaller cities across the nation.
Under Union Tax Law 2017, one percent commercial tax from jewelry purchases and five percent commercial tax on gold bar purchases are levied. However Pyidaungsu Hluttaw — Union Parliament — agreed to abolish the five percent commercial tax from gold bar purchases, while the one percent commercial tax from jewelry purchases would remain.
Although the Union Tax Law has been active since April 1, taxe collection didn’t start till June 1, because K5,000 and K10,000 tax stamps were only available in late May.
‘‘Stamps are used to reduce tax lost. Before the stamps were available, we collected taxes by letting them [buyers] write on their receipts that the sales tax was paid,’’ said U Min Htut.
According to the Commercial Tax Law, sellers who failed to pay taxes must pay fine equal to 10 percent of the value of each sold item, and buyers who inform the authorities of tax fraud will be awarded with the sellers fine.