A 5 percent tax will be levied on mobile phones and mobile accessories. However, it will not affect shops selling new phones. Only the second-hand market is likely to be affected, said Ko Wai Yan Zaw, a shop owner from Pyin Oo Lwin.
For him, taxes of 5pc are quite high. “We have to pay K50,000 in tax for a hand phone that costs K1 million,” he said.
In fact, Ko Wai Yan Zaw pointed out some businesses could end up paying tax twice on second-hand phones, because tax is already levied on new phones. “We are waiting for a finalised rate. If 5pc tax is confirmed, all the second-hand shops will submit a letter together,” he said.
The official; at the IRD said the aim of the tax is to minimise the number of illegal phones being smuggled into the region and also make sure that the government receives taxes related to phones.
“We’ve compiled a list of hand phone shops. We can’t get list of small shops. We’ve recorded phone shops and taken photos in order to get started as soon as possible,” he said.
A phone shop owner from Mandalay said his shop was already inspected by the revenue department. However, he still doesn’t know when taxes will be collected.
“We are planning to start collecting tax as soon as possible. But we have to explain to the local entrepreneurs why we are doing so. If we impose tax without letting them know the reasons, they will misunderstand us. We will collect the taxes as soon as we confirm the dates,” the IRD offiial said.
This year, the IRD has already levied a 5pc commercial tax on restaurants, hotels, motels and guesthouses. Meanwhile, gold shops have been levied taxes of 1pc.