On 28 August 2024, the State Administration Council enacted Law No. 54/2024, introducing significant amendments to the Union Taxation Law. This Amendment Law, which will take effect from 1 October 2024, to 31 March 2025, brings notable changes to the taxation of gold and gold-related products.
Key Provisions of the Amendment Law
1. Removal of Tax Exemptions on Gold:
The Amendment Law removes the tax exemptions previously granted to specific gold products. According to Section 3 of the new law, the words "Pure gold; gold bullions (standard gold bars, gold bullions, gold coins) and" found in No. 39 of the Schedules attached to the Commercial Tax Law under Subsection (a) of Section 14 of the 2024 Union Taxation Law have been deleted.
This means that the previously exempt pure gold and gold bullion will now be subject to commercial tax.
2. Introduction of a 3% Commercial Tax
The most significant change introduced by this amendment is the imposition of a 3% commercial tax on the sale and importation of gold products. Under the revised, a 3% commercial tax will now be levied on:
the sale of pure gold
sale of gold bullions (standard gold bars, gold bullions, gold coins)
the sale of gold ornaments
landed costs in the case of imports of the above-mentioned gold products
This 3% commercial tax is a material increase from the previous rate, which was 1%.
Possible Reasons Behind the Changes
The recent amendments to the Union Taxation Law may be driven by broader economic factors affecting Myanmar. In recent times, the value of the Myanmar Kyat has been decreasing, leading to inflationary pressures. Additionally, there have been difficulties in withdrawing money, which has caused many people to seek safer and more stable assets. This has led many people to buy gold, foreign currency, and other stable assets to protect themselves from inflation and the weakening Kyat. By imposing a higher tax on gold products, the government may be aiming to curb gold purchases and stabilise the financial system by reducing speculative transactions. Although with such rapid devaluation of the Kyat the introduction of an additional tax may not do much to temper the appetite for gold.
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