Income is computed on the basis of one fiscal year which starts on April 1 and ends on March 31 of the following year. The fiscal year in which income is received is expressed as "income year" and the year following it as "assessment year".

At present, there are fifteen types of taxes and duties under the four main categories.

A person or an enterprise operating under the Foreign Investment Law is liable to income tax on the income accruing or derived from all sources within the Union of Myanmar.

A flat tax rate of 30 per cent is applicable to an enterprise operating under the Foreign Investment Law and those operating under the Myanmar Companies Act.

A foreign employee of any enterprise operating under the Foreign Investment Law, for income tax purposes, could be treated as a resident citizen. As a consequence, progressive tax rates starting from 3 per cent to a maximum ceiling of 30 per cent is applicable. This progressive rate also applies to Co-operative Societies. From the total income, a basic allowance of 20 per cent of total income subject to a limit of K 6000, wife and children allowances and life insurance premium for the employee and spouse are deductible before the rates are applied.

Relief allowed for the wife of an assessee is K 2500. However, the wife shall not on her own earn on assessable income within the income year.

Children allowance:

(i) For each child under 5 years of age K 500
(ii) For each child above 5 & under 10 years K 600
(iii) For each child above 10 & under 15 years K 800
(iv) For each child above 15 years K 1000

Children must be unmarried / if over 18 years, receiving full time education having no taxable income of his or her own.

The employer responsible for paying income chargeable under the head " Salaries " must at the time of payment, deduct income tax due from such payment and remit the amount to the Town Revenue Office. Employers are also required to furnish an annual return pertaining to such deductions within three months of the end of the income year.

Payments on income such as interests, royalties and on contracts are subject to withholding tax at various rates as shown in the table below.

Type of income	Withholding tax rates
	For resident foreigners	For non-resident foreigners
1. Interests	15 %	20 %
2. Royalties for the use of licence, trade marks, patent rights etc.	15 %	20 %
3. Payment on contracts undertaken by State organisations, development committees and co-operative societies	3 %	3.5 %
4. Payment for work done to foreign contractor	2.5 %	3 %

A relief of early years of inception may be applied.

An enterprise covered by the Foreign Investment Law is entitled to a tax holiday period of three consecutive years inclusive of the year of commencement of production or services and also to a further reasonable period, provided the Commission in the interests of the State considers such extension is appropriate.

In addition, the enterprise may obtain any or all of the following exemptions and reliefs:

1. Exemption or relief from tax on profit held in reserve and ploughed back into the business within one year.
2. Accelerated depreciation of capital assets.
3. Relief from up to 50 per cent of income tax on the profits arising from the export of goods produced by the enterprise concerned.
4. Allowance for research and development expenditure which is necessarily incurred within the State.
5. Right to carry forward and set-off losses up to three consecutive years from the year the loss is sustained.
6. Right to deduct an amount of income tax paid to the State on behalf of a foreign, employee from the assessable income of the enterprise.
7. Exemption or relief from customs duties and/or other taxes on machinery equipment, components, spareparts, instruments and other materials imported during the period of construction.
8. Similar exemption or relief on raw materials imported in the first three years' commercial production following the completion of construction.

Dividends and share-profits received are not treated as part of the total income of the recipient and are exempted from tax. Expenses incurred in earning the income, and the depreciation allowance inclusive of initial depreciation allowance in respect of capital assets are deductible from the gross income but it does not include expenses which are of capital, personal or domestic nature, and which are not commensurate with the volume of business. The payments made by a firm or an association of persons to its partners by way of salaries, wages, bonuses, commissions are also not allowed.

Amount actually donated to any approved institution or fund established for religious or charitable purpose is also deductible but not exceeding twenty five percent of the total income.

A loss, not being a capital loss or a share of loss, from a source of income can be set off against the income from the remaining sources of income in the same year. Unabsorbed net loss can be carried forward and set off up till the following three consecutive years.

Advance tax is payable monthly or quarterly by an enterprise in the course of the year in which the income is made on the basis of projected income for the whole year and credit is given for such payment in the regular assessment.

The return of income is to be filed with the Office of the Internal Revenue in the respective townships on or before June 30 following the income year, but on the business being discontinued it is to be filed within one month from the date of discontinuation.

Returns for capital gains are also to be sent in within one month of the disposal of the capital assets concerned.

With a few exceptions, all imported goods are liable to customs duties and would accordingly have to be declared to the Customs Department. In order to levy customs duties in accordance with the market oriented economic system and to have a harmonised system of grouping and symbolising goods as practised in most nations of the world, the Tariff Law was promulgated in March 1992 and notifications have been issued. The customs duties levied on the imports of machinery, spare parts and inputs, generally range from 5 per cent to 30 per cent.

With regard to export duty, tax is levied on the export of a few commodities. The rates applicable are K. 10 per metric ton for rice and rice flour, 10 per cent ad valorem for bamboo and 5 per cent ad valorem for rice bran, rice dust, raw hides and skins, oil cakes, pulses and cereals, other than rice and rice products.

The Commercial Tax Law was promulgated on March 31, 1990 and became effective from the financial year 1990/9 1. This law was amended in March 199 1. Commercial tax is a turn over tax levied on goods and services. The tax is imposed on a wide range of goods and services produced or rendered within the State and the imported goods from abroad. Except for trade, the tax is imposed as an ad valorem single stage tax, that is at the point of sale of producer or manufacturer for domestically produced or manufactured goods.

The tax payable for imported goods is to be collected by the Customs Department in the same manner as the customs duty is collected.

Regulations are provided to set off input from output tax in case of production and services in order to avoid tax cascading.

The tax is levied according to the schedules appended to the said law. Schedule I lists tax free items comprising 65 essential and basic commodities. Schedule II to V carry rates ranging from 5 per cent to 25 per cent depending on the nature of the goods. The tax will be charged on the landed cost of the imported goods and on the sale proceeds of the goods produced within the State. Schedule VI is for specific type of commodities such as cigarette, fuel oil, liquor, pearl, jade and gems on which tax is chargeable at rates ranging from 30 per cent to 200 per cent and Schedule VII is applicable to services including trade.

On the proceeds of sale from trading business, no tax shall be payable according to Schedule VII, serial number 3 in respect of goods imported from abroad.

The tax rates for services are 8 per cent on passenger transport fares, 30 per cent on movie shows, 15 per cent on other forms of entertainments, 5 per cent on trading and 10 per cent on hotel, lodging and restaurant services.

There are provisions for the exemption of commercial tax whenever such exemption is considered appropriate particularly as incentives for newly established business and exports.

Every enterprise engaged in the production of goods and services liable to commercial tax must first be registered with the Township Revenue Office. An application for registration must be filed one month before the commencement of business, furnishing an intimation within ten days of the commencement of business.

The tax is payable monthly on or before the 10th of each month for gross sales or receipts of the preceding month. Quarterly gross sales or receipts must be filed with the Township Revenue Office within one month of the end of the respective quarter. An annual return must also be filed within three months of the end of the respective year for the purpose of final assessment.