In the commonwealth network, governments generally announce their annual budgets and implementation plans on the first day of the fiscal year. The annual budget not only reflects a country's monetary budget but also presents the areas of significance to the government in that fiscal year.
Myanmar's 2015-2016 fiscal year officially began on April 1 and will end on March 31, 2016. This year, the total economy is expected to be valued at approximately US$70.8 billion, with a deficit reaching $2.9 billion and foreign debt of $19.4 billion.
Myanmar's new annual budget highlights positive modifications to the country’s taxation regime with regard to foreigners.
During the 2014-2015 fiscal year, Myanmar levied a 35 per cent tax on foreign branch offices. This year, the tax on branches with foreign headquarters has been reduced to 25 per cent. Myanmar is also deliberating a significant reduction in the tax levied on capital gains received by non-resident foreigners, from 40 per cent to 10 per cent. However, the Myanmar government has not yet reached a consensus on this matter. Whether or not the capital gains tax will be reduced remains to be seen. In addition to the aforementioned reductions in company-related taxes, Myanmar has modified its system of collecting personal income tax (PIT) from non-resident foreign individuals. In the past, all non-resident foreigners who earned income in Myanmar were subject to PIT at a flat-rate of 35 per cent, regardless of the level of income earned. Now, modifications to the taxation regime as per the 2015-2016 budget subject non-resident foreigners PIT at progressive rates, just like Myanmar residents.
Myanmar has also modified its Commercial Tax (CT) system. Myanmar removed computers and telephone hand-sets from the special commodities CT exemptions and added 24 additional items to the list, including insecticides, animal feed, school text books, solar sheets and X-ray film. Myanmar also made changes to the list of services except from CT. Last fiscal year, there were 26 services on the list. This year, there are 23 services. Four items (butcher licenses, container box transportation, media information and technology and technology and administrative consultancy services) were removed from the 2014-2015 list and one item (license fees payable to the government) was added to the 2015-2016 list.
Myanmar appears to be working toward a more equitable tax and living environment for locals and foreigners alike. As income levels and standards of living rise, the Myanmar government is willing to lend a helping hand in decreasing the tax burdens of those who earn Myanmar-sourced incomes and those who consume goods and services in Myanmar. This, in turn, impacts the willingness of foreigners to contribute time, money and experience in developing Myanmar through ordinary business operations.
At this stage in Myanmar's development, the influence of foreign skilled workers is greatly needed to cultivate skills in the local workforce. The Myanmar government is clearly seeking a way to simultaneously provide a more comfortable environment for foreign workers and protect local interests