Revenue Department to slap income tax on all types of property rents
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The Internal Revenue Department plans to levy income tax on all types of property rents, in an effort to stem the losses in tax revenue.
All income from renting out houses, condominiums, apartments and industrial plots will be taxed accordingly, said the Finance Ministry’s department.
In Yangon, a commercial hub of Myanmar, the price of rent has been rising exponentially. Many landowners do not pay tax on the income they earn from renting their property, amounting at times to millions of Kyat of lost revenue.
“Those who earn income is subjected to taxes,” said Tun Than, director of the Internal Revenue Department in Nay Pyi Taw. “The number of people who are taxed for their rental income is much lower than the number of people actually renting properties. That’s why we plan to systematically start collecting the taxes.”
It is estimated that up to one million people rent property in Yangon and Mandalay, with more than 14,000 appearing daily adverts in newspapers and journals, according to real estate agents.
At present, landlords are obliged to declare 25 per cent of rental charges as taxable income.
A detached house in a good business area in Yangon can fetch from Ks 6 million (US$ 6,250) to Ks 29 million (US$ 30,200) per month.
Condominium owners can earn between Ks 1 million to Ks 6.5 million a month renting rooms in downtown areas. A warehouse in the industrial area can fetch between Ks 800,000 (US$ 833) and Ks 7 million (US$ 7,291) a month.
Many industrial land plots are owned by landlords who have bought up empty land and now charge sky-high rental rates, fuelling speculation and land-grabbing. Many residents have to pay rents or face eviction.
The yearly increase in rental charges has caused more difficulties for lower income earners while the country loses a huge amount in uncollected income tax from landowners and speculators.
