Myanmar nationals, when buying a car from a previous owner or showroom, oftentimes retain ownership of the car under the name of the old owner in order to avoid tax. Road Transport Administration Department (RTAD) has ordered car owners to change ownership of cars to the current owner’s name and address. The department will renew registrations only for cars with legal ownership in coming years.
“Car owners can obtain legal ownership until September 30, 2020. If they fail to do so in that given time, there will be fines if an illegal car is involved in an accident,” said U Lian Kyint Man, Director of the Road Transport Administration Department.
The move is part of an effort to make law enforcement easier with legitimate car ownership, name and address and to fit with Radio Frequency Identification (RFID).
However, car owners are hesitant to obtain ownership under their names as they want to avoid tax. Automobile Law (2015) says that car owners must change ownership status to their name within 30 days of signing the contract, otherwise they will face a K100,000 fine. The law is now being amended and the fine is planned to increase to K300,000.
The Union Tax Law 2019, which is revised yearly, has lowered the commercial tax. Therefore, there will be 3 percent tax for cars under K10 million, 5 percent for K10-30 million, 10 percent for K30-100 million, 15 percent for K100-300 million and 30 percent for above K300 million.
Despite the lowering rates, car owners and local automobile associations do not welcome the move requiring them to obtain legal ownership.
Currently, the department will focus on changing legal ownership and thereafter will handle changing license plates from other areas into Yangon license plates. It is hard to identify these cars as the Yangon Regional Government has stopped issuing Yangon License plates in an effort to reduce the number of vehicles in Yangon.