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What Major Changes Are Included Under The Union Tax Law 2021?

What Major Changes Are Included Under The Union Tax Law 2021?

January 21, 2022

The Union Tax Law 2021 (“UTL 2021”) was enacted on 30 September 2021 by the State Administration Council (“SAC”). It is applicable for the financial year (“FY”) 2021-2022 (1 October 2021 to 31 March 2022). Some notable changes under the UTL 2021 for taxpayers are the reductions in tax rates on the taxable profits of businesses and undisclosed sources of income for Myanmar citizens, and the expansion of income ranges for the imposition of Personal Income Tax (“PIT”).

In addition, the SAC enacted Law No. 1/2022 on Amending the UTL 2021 (“Amended UTL 2021”) on 6 January 2022, mainly to levy additional Commercial Tax (“CT”) on internet services. The Amended UTL 2021 took effect on 8 January 2022 and is valid until 31 March 2022.

A summary of the changes under the UTL 2021 and Amended UTL 2021 is provided below.

Alcoholic beverages and cigarettes

The Specific Goods Tax (“SGT”) rates for cigarettes, cheroots, liquor, and wine have increased under the UTL 2021. We understand that the increased SGT rates will serve as a form of market control of liquor and tobacco consumption. In addition to the increase in rates, it should be noted that the minimum price of liquor subject to SGT has been lowered from MMK300 to MMK200. Thus, only liquor priced lower than MMK200 per liter will be exempt from SGT.

A summary of the changes is as follows.

Corporate Income Tax

In order to enhance the development of businesses and investments impacted by COVID-19, the CIT rate has been reduced from 25% to 22% under the UTL 2021.

Commercial Tax changes and exemptions

Under the UTL 2021, the CT rate remains the same, at 5%, for most goods and services subject to CT. The following goods have been added to the CT exemption list—creamers, and mosquito repellents for home use purchased locally. For hotel and tourism services, and the construction, renovation, and sale of buildings (whether by renting State-owned land or a joint venture (“JV”) with the State or on privately-owned land or by entering into a JV with a private landowner), CT will be applicable at a reduced rate of 3%. For the importation and sale of gold jewelry, 1% CT is now applicable.

With the issuance of the Amended UTL 2021, the CT rate for internet services has increased from 5% to 15%. In addition, a one-time CT charge of MMK20,000 will now be levied on each sale of a SIM card and SIM card activation.

Undisclosed income

Under the UTL 2021, income escaping assessment (undisclosed income) is taxed at reduced rates. Thus, if a Myanmar citizen who is buying a capital asset (e.g. land or a car) cannot prove the source of income for the funds used in the purchase of such asset, such funds will be subject to income tax at progressive tax rates ranging from 3% to 30%. An additional favorable development is that under the Amended UTL 2021, the income ranges for the charging of these progressive rates have been expanded for FY2021-2022.

Personal Income Tax

The income ranges have been expanded for the imposition of PIT as per the table below:

Click to enlarge


The UTL 2021 and amended UTL 2021 largely provide favorable tax rates and exemptions for taxpayers. Due to a short financial year, the above rates are only applicable to 31 March 2022. We have issued a separate briefing note on undisclosed income tax where the amnesty rates do provide substantial savings.


Nway is a tax manager in our tax team with experience in accounting and consulting for international enterprises in Myanmar. She holds a Diploma in Accounting and Business from ACCA and a Diploma in Accounting from LCCI.

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