Myanmar Gears up to Control Tobacco Products Market

Source from:  Eleven 09/22/2015

According to a workshop meeting on taxation of cigarettes and tobacco products, Myanmar taxes manufacturers only based on products' factory value, resulting in tax evasion and low tax rates for duty-free factories.

Myanmar's taxation of tobacco products started in the colonial era in the form of the Cigarettes Duty Act in 1931 and has continued since then under the profit tax law, general sales tax law, sales tax law, income tax law, goods and services tax law, trade tax law and Union tax law.

"This year saw the cigarette tax rate rise from 100 per cent to 120 per cent under the Union tax law. Taxes on other tobacco products were raised from 50 to 60 per cent. But even though the taxes are getting higher, they are still based on the factory value of the products, unlike other countries, where taxes are based on market prices. The factory values have been found to be too low," said Dr Kyaw Soe from People's Health Foundation.

He continued: "Recently, we wanted to find out how many types of cigarettes there are at supermarkets and bought a total of 30 different brands. Think of the magnitude of the fact that you can get around 30 different types of cigarettes from a supermarket. Some only cost around Ks 300 per box, which comes with 20 cigarettes inside, which is only around the price of a cup of tea. So the 20 per cent increase is miniscule when you look at the situation."

Based on data compiled by Myanmar's Medical Research Department, Myanmar has a high rate of oral cavity cancer, which is one of the most common cancer in Asean countries.

Tobacco products, including cigarettes and betel nut, are the primary causes of oral cavity cancer, according to the Department of Public Health. The government is working on by-laws to educate and protect citizens from the effects of such habits.

"In Myanmar, apart from cigarettes, there is heavy consumption of betel nuts for chewing. According to the tax rates for shops, only when income rises above 10 lakhs (about US$800) annually do shops have to pay taxes on these products. While it seems like the tax laws are getting stricter, some stalls are earning up to three lakhs per day, though most of them deny earning that much. There has been a large increase in consumers as well as sellers, and since there is no strict control, the rates of oral cancer and uncleanliness are rising. These are the reasons for the drive to add to and edit the law regarding cigarettes and tobacco products," added Dr Kyaw Soe.

Currently, Myanmar ranks first in betel nut chewing worldwide.

It is estimated that there are around 291 billion illegal cigarettes in circulation within the Asean region. Enditem