The State Peace and Development Council
The State Budget Law, 2001
(The State Peace and Development Council Law No. 4/2001)
The 5th Waxing Day of Hnaung Tagu, 1362 M.E.)
( 28thMarch, 2001)

The State Peace and Development Council hereby enacts the following Law: -

Part I
Title and Date of Enforcement

1. (a) This Law shall be called the State Budget Law, 2001.

(b) This Law shall come into force from 1st April, 2001 for the 2001-2002 financial year.

(c) With the exception of sections 24, 26, 29, 55 and 56 contained in Part VI and Part VII of this Law, the provisions of the remaining sections relating to commercial tax and income-tax shall come into force from the assessment year commencing from 1st April, 2001.

(d) The provisions contained in sections 24, 55 and 56 of this Law relating to commercial tax and income-tax on export sale, in case of border trade between the Union of Myanmar and the People’s Republic of China, and between the Union of Myanmar and the Republic of India, shall come into force from 15th November, 2000, and in case of border trade between the Union of Myanmar and Thailand, shall come into force from 1St January, 2001.

(e) The provisions relating to commercial tax contained in section 26 of this Law shall come into force from 26th May, 2000.

(f) The provisions contained in section 29 of this Law relating to income under the head of salary shall have effect from 1st April, 2001.

Part II

The State Peace and Development Council, Multi-Party Democracy General Election Commission, Government, Chief Justice, Attorney General, Auditor General, Ministries and Departments.

Chapter I
Receipts and Expenditures

2. The State Peace and Development Council, Multi-Party Democracy General Election Commission, Government, Chief Justice, Attorney General, Auditor General, Ministries and Departments shall carry out their functions in accordance with the State Budget Programme. In carrying out such functions, all receipts shall be credited to the State Budget and all expenditures payable shall be debited from the State Budget.

3. (a) The respective persons who have been given the responsibility for the receipts and expenditures of the State Peace and Development Council, Multi-Party Democracy General Election Commission, Government, Chief Justice, Attorney General, Auditor General, Ministries and Departments shall supervise and collect those receipts and administer those expenditures as are shown against them in Schedules (1), (2), (3) and (4).

(b) The respective persons who have undertaken the responsibility under subsection (a) may delegate their powers to the respective persons serving under them.

(c) Supervision and collection of the receipts and administration of the expenditures shall be in accordance with the provisions of this Law,
relevant laws, rules, regulations, by-laws, orders, directives and procedures.

4. (a) Out of the estimated receipts shown in Schedules (1) and (3), if foreign aids and loans received under Chapter III exceed the estimated amount, and if expenditures of those works which are to be incurred out of such excess amount received as foreign aids and loans are in excess of the sanctioned expenditures shown in Schedules (2) and (4), the Government may approve after scrutiny. Provided that, if expenditures to be incurred out of the State Budget in kyats converted from the aforesaid foreign aids and loans are not covered by the sum shown in Schedules (2) and (4), then it may be incurred out of the reserve fund in accordance with the provisions of section 6.

(b) The Government shall submit matters relating to expenditures in excess permitted under sub-section (a) to the State Peace and Development Council together with objects and reasons casewise.

5. In respect of any alterations of sums shown in Schedules (1), (2), (3) and (4) under requirement of work, it shall be shown in the revised estimate budget for the 2001-2002 financial year submitted to the State Peace and Development Council.

Chapter II
Reserve Fund

6. (a) Expenditures incurred by the State Peace and Development Council, Multi-Party Democracy General Election Commission, Government, Chief Justice, Attorney General, Auditor General, Ministries and Departments out of the reserve fund shown in Schedule (4), column 12 shall be effected only in accordance with the following conditions: -

(i) being expenditure which cannot be anticipated;
(ii) being a case in which expenditure must be. incurred within the financial year;
(iii) where transfer of budget heads cannot be effected or where there is no allotment for transfer of budget heads under the existing laws, rules, regulations and bye-laws.

(b) Any expenditure from the reserve fund shall be made only by the decision of the Government.

(c) The Government shall submit matters relating to expenditure to be incurred out of the reserve fund to the State Peace and Development Council together with objects and reasons casewise.

7. The State Peace and Development Council, Multi-Party Democracy General Election Commission, Government, Chief Justice, Attorney General, Auditor General, Ministries and Departments shall not be allowed to sub----’ supplementary budget of the State in respect of receipt of amounts in excess of or less than the estimated amount under this Law or appropriation of allotment by transferring budget heads within the sanctioned expenditure or expenditure or expenditure incurred from the reserve fund or expenditure incurred with the sanction of the Government under section 4. Provided that, if expenditures in conformity with the conditions contained in section 6 or not covered by the reserve fund allowed under this Law, then such expenditures may be submitted to the State Peace and Development Council together with objects and reasons casewise.

Chapter III
Taking of Loans

8. For the purpose of projects or for expenditures shown in the State Budget, the Government may take loans by issuing security bonds guaranteed by Government or debentures or by other means, within the country or from abroad. Reasonable rates of interest may be prescribed for such loans. Conditions for repayment, redemption or provision otherwise may also be stipulated.

9. Regarding loans obtained by issuing security bonds for covering the deficit in the budget of the previous financial year, new security bonds may be issued when payment of the loan becomes due.

10. The State Economic Organizations and Cantonment Municipalities may take loans from abroad, for their projects with the approval of the Government.

11. The Government may grant permission to any Government Department to borrow money from abroad for any project.

12. (a) The Government may empower the Minister of the Ministry of Finance and Revenue for carrying out wholly or partly the duties contained in this Chapter III.

(b) The Minister of the Ministry of Finance and Revenue may, on behalf of the State furnish guarantees for the taking of loans under this Chapter III.

13. During the financial year commencing’ 1st April 2001’ and ending on 31st March 2002 the amount of loans actually received by execution of loan agreements under this Chapter III shall not exceed Kyats ninety thousand million.

PART III
State Economic Organizations

14. The State Economic Organization shall carry out their functions in accordance’ with the State Budget Programme. In carrying out such functions, all receipts shall be credited to the State Budget and all expenditures payable shall be debited from the State Budget.

15. (a) The respective persons who have given the responsibility for the receipt and expenditure of the State Economic Organizations shall supervise and collect those receipts and administer those expenditures as are shown against them in Schedules (5) and (6).

(b) The respective persons who have undertaken the responsibility under sub-section (a) may delegate their powers to the respective persons serving under them.

(c) Supervision and collection of the receipts and administration of the expenditure shall be in accordance with the provisions of this Law, relevant laws, rules, regulations, bye-Law, orders, directives and procedures.

16. (a) The Government may alter the amounts shown in Schedules (5) and (6), if it becomes necessary for the functions of the State Economic Organizations. Such alterations shall be shown in the revised estimate budget for the 2001-2002 financial year submitted to the State Peace and Development Council together with objects and reasons therefor.

(b) The Government may determine the amount of money to be contributed by the State Economic Organizations towards the State.

PART IV
Cantonment Municipalities

17. The Cantonment Municipalities shall subsist on their own funds and shall carry out their functions in accordance with their Budget Programmes.

18. (a) The respective persons who have been given the responsibility for the receipt and expenditure of Cantonment Municipalities shall supervise and collect those receipts and administer those expenditures as are shown against them in Schedules (7) and (8).

(b) The respective persons who have undertaken the responsibility under sub-section (a) may delegate their powers to the respective persons serving under them.

(c) Supervision and collection of the receipts and administration of the expenditures shall be in accordance with the provisions of this Law, relevant laws, rules, regulations, bye-laws, orders, directives and procedures.

19. (a) The Government may alter the amounts shown in Schedules (7) and (8), if it becomes necessary for the functions of Cantonment Municipalities. Such alterations shall be shown in the revised estimate budget for the 2001 - 2002 financial year submitted to the State Peace and Development Council together with objects and reasons theref or.

(b) The Government may permit Cantonment Municipalities to obtain money required for carrying out their functions or for investment from grants or loans.

20. The Cantonment Municipalities may collect only such rates and taxes permitted by the existing laws, rules, regulations, bye - laws, orders, directives as are relevant to them.

PART V
Development Committees and Municipalities

21. The Government may grant loans and contributions to the Development Committees and Municipalities.

PART VI
Commercial Tax

22. The types of services and the tax rates mentioned in the following table shall be inserted in Schedule 7 of the Commercial Tax Law after serial number 5 as serial numbers 6,7,8,9 and 10:

SerialNumber Types of Service The amount based upon which computation is to be made Tax percentage
6 Tourism business (including business of tourist guide ) Total amount of proceeds obtained from tourists 5
7 Cleansing and oiling of motor vehicles Total amount of proceeds including the costs of materials 10
8 Insurance business other than life Total amount of premium 5
9 Hairdressing Physical beautification and exercise business Total amount of proceeds including the cost of materials 5
10 Printing Total amount of proceeds for printing 5

23. Notwithstanding any provision contained in Schedule 1 to Schedule 6 and in serial number 3 of Schedule 7 of Commercial Tax Law, if foreign currency is included in the proceeds of sale or total proceeds of sale received by any person from any production and sale of the kinds of goods contained in Schedule 1 to Schedule 6 or from any trading business of purchase and sale of goods contained in serial number 3 of Schedule 7, commercial tax equivalent to 8 percent of the amount of foreign currency so included shall be paid in such foreign currency.

24. Notwithstanding any provision contained in Schedule 1 to Schedule 6 and in serial number 3 of Schedule 7 of Commercial Tax Law, in border trade between the Union of Myanmar and the People’s Republic of China, between the Union of Myanmar and the Republic of India and between the Union of Myanmar and Thailand, if the proceeds of sale from export are received by any person in kyats from production and sale of the kinds of goods contained in Schedule 1 to Schedule 6 or from any trading business of purchase and sale of goods contained in serial number 3 of Schedule 7, commercial tax equivalent to 8 percent of the total proceeds of sale so received shall be paid in kyats.

25. The provisions contained in sections 23 and 24 shall not be applicable to export items of the enterprises carried out with the permit issued by the Myanmar Investment Commission, export items re-exported by the enterprises by cutting, making and packing (CMP) system and proceeds of sale from export and sale of export items of the mineral sector, energy sector and forestry sector. Provided that, in case of sale locally in foreign currency, commercial tax equivalent to 8 percent of the proceeds of sale shall be paid in such foreign currency.

26. For the avoidance of double taxation payments, if any person has previously paid tax in foreign currency for a type of commodity, no commercial tax shall be assessed again in foreign currency on the proceeds of sale from export of such commodity.

27. The provisions contained in sections 23, 24 and 25 shall not be applicable to the determination of the amount of sale proceeds or proceeds form service on which tax should not be assessed by notification issued under sub-section (b) of section 8 of the Commercial Tax Law.

PART VII
Income Tax

Chapter I
Definition

28. The definition of expressions contained in this Part shall be as mentioned in the Income-Tax Law.

Chapter II
Private Income - Tax Rates

29. Tax on income under the head of salary shall be assessed on any person as mentioned in the following table:-

SerialNumber Level of income taxable on the remaining salary income after deducting the relief's prescribed Rates of tax to be assessed
From To
Kyats Kyats
1 1 5000 3 percent
2 5001 10000 5 percent
3 10001 20000 7 percent
4 20001 30000 10 percent
5 30001 50000 12 percent
6 50001 70000 15 percent
7 70001 90000 16 percent
8 90001 110000 17 percent
9 110001 150000 18 percent
10 150001 200000 19 percent
11 200001 300000 20 percent
12 300001 500000 22 percent
13 500001 and above 30 percent

30. In case of non-resident Myanmar citizens, the income-tax shall be assessed- at the rate of 10 percent on the total income earned abroad in foreign currency, before deducting any reliefs allowed under section 6 of the Income-Tax Law.

31. In case of a foreigner engaged in any project or transaction of the State or sponsored by the State, with the approval of the Ministry concerned, the income-tax shall be assessed at the rate of 20 percent of the total income earned in kyats by such person, before deducting any reliefs allowed under section 6 of the Income - Tax Law.

32. In case of a corporate body formed in a foreign country, which is engaged in any project or transaction of the State or sponsored by the State, with the approval of the Ministry concerned, the income-tax shall be assessed at the rate of 30 percent of the total income earned in kyats by such corporate body, before deducting any reliefs allowed under section 6 of the Income - Tax Law.

33. In case of a company incorporated and registered in Myanmar under the Myanmar Companies Act or under the Special Company Act of 1950, the income-tax shall be assessed at the rate of 30 percent of the total income earned in kyats by such company, before deducting any reliefs allowed under section 6 of the Income-Tax Law.

34. In case of a non-resident foreigner, the income-tax shall be assessed at the rate of 35 percent of the total income, before deducting any reliefs allowed under section 6 of the Income-Tax Law. (If the income is earned in foreign currency, the income-tax shall be paid in such foreign currency. Provided that, if the income-tax calculated at the relevant rates prescribed in the table under section 35 exceeds the amount calculated at 35 percent. then the amount whichever is more shall be paid.)

35. With the exception of sections 30, 31, 32, 33 and 34, the income earned from profession, business, property, undisclosed source and other sources shall be assessed as mentioned in the following table:-

SerialNumber Level of income taxable on the remaining salary income after deducting the relief's prescribed Rates of tax to be assessed
From To
Kyats Kyats
1 1 5000 5 percent
2 5001 10000 10 percent
3 10001 20000 11 percent
4 20001 30000 12 percent
5 30001 40000 14 percent
6 40001 50000 15 percent
7 50001 80000 16 percent
8 80001 110000 17 percent
9 110001 150000 18 percent
10 150001 200000 19 percent
11 200001 300000 20 percent
12 300001 400000 22 percent
13 400001 1000000 25 percent
14 1000001 2000000 35 percent
15 2000001 and above - 40 percent

Chapter , III
Income - Tax Rates for Co-operative Societies

36. Income of Primary Co-operative Society, Co-operative Syndicate, Union of Co-operative Syndicate or Central Co-operative Society formed and registered under the Co-operative Society Law, shall be assessed as mentioned in the following table.-

SerialNumber Level of income taxable on the remaining salary income after deducting the relief's prescribed Rates of tax to be assessed
From To
Kyats Kyats
1 1 5000 3 percent
2 5001 10000 5 percent
3 10001 20000 7 percent
4 20001 30000 10 percent
5 30001 50000 12 percent
6 50001 70000 15 percent
7 70001 90000 16 percent
8 90001 110000 17 percent
9 110001 150000 18 percent
10 150001 200000 19 percent
11 200001 300000 20 percent
12 300001 500000 22 percent
13 500001 and above - 30 percent

Chapter . IV
Income - Tax Rates for State-owned Economic Enterprises

37. The income-tax on the total income of the State-owned Economic Enterprises shall be assessed at the rate of 30 percent before deducting any reliefs allowed under section 6 of the Income-Tax Law.

Chapter V
Income - Tax Rates on the Capital Gains of Private Sector, Co
operative Societies and State - owned Economic Enterprises

38. The income-tax on the capital gains in kyats or in foreign currency shall be assessed at the rate of 10 percent before deducting any reliefs allowed under section 6 of the Income-Tax Law. Provided that, in the case of a nonresident foreigner, the income-tax shall be assessed at the rate of 40 percent.

Chapter VI
Income - Tax Rates on Enterprises of Private Sector, Co-operative
Societies Undertaken Under a Permit of the Myanmar Investment
Commission

39. If the enterprise is undertaken with the permit issued by the Myanmar Investment Commission, the income-tax shall be assessed at the rate of 30 percent on its total income before deducting any reliefs under section 6 of the Income-Tax Law.

Chapter VII
Determination of Income on which No Assessment is to be made

40. In assessing income-tax for the head of salary under section 29, no income-tax shall be assessed if the total income of salary does not exceed kyats 30000.

41. In assessing income-tax under sections 35 and 36. no income-tax shall be assessed if the total income of salary does not exceed kyats 30000.

42. If capita assets of one or more are sold, exchanged or transferred, and if the total value of the such transactions within a year does not exceed kyats 100000, no income-tax shall be assessed thereon.

43. In a case where the income exceeds the amount shown in sections 40, 41 and 42, but the excess is not substantial, the Ministry of Finance and Revenue may, by notification, prescribe special methods of calculating the assessment of income-tax as required, so that there shall be fairness in assessment and without imposing a heavy burden.

44. Notwithstanding any provision contained in sub-section (b) of section 4 of the In come - Tax Law, no additional income-tax shall be assessed other than the income-tax assessed under the rates of this Part.

Chapter VIII
Exemption and Relief

45. The basic reliefs allowed under sub-sections (a) and (b) (1) of section 6 of the Income-Tax Law shall be an amount equivalent to 20 percent of each type of income. Provided that the total of basic reliefs for a year shall not exceed kyats 12000.

46. The reliefs for the spouse and children of a taxpayer, other than a corporate body under sub-section (b) (2) of section 6 of the Income-Tax Law, shall be allowed as follows -

(a) kyats 5000 for only one spouse of taxpayer;

(b) kyats 1000 for each child not over 5 years of age;

(c) kyats 1200 for each child above 5 years of age but has not yet attained 10 years;

(d) kyats 1600 for each child above 10 years of age but has not yet attained 15 years;

(e) kyats 2000 for each child above 15 years of age.

47. The reliefs allowed under sun-sections (b) (3) and (4) of section 6 of the Income-Tax Law shall be the amount actually paid by the taxpayer during the relevant income year.

Chapter IX
Assessment in Kyat and in Foreign Currency

48. Notwithstanding any provision contained in the Income-Tax Law, Myanmar citizen who earn foreign currency from the sale of goods produced and from carrying out any business, shall pay 2 percent of the total foreign currency earnings as income-tax in such foreign currency.

49. The payment of 2 percent income-tax for the total foreign currency earnings contained in section 48 shall not be applicable to receipts from an enterprise carried out with a permit issued under the Myanmar Citizens Investment Law.

50. If foreign currency is received from an enterprise carried out with a permit issued under the Myanmar Citizens Investment Law, the income-tax shall be calculated in accordance with the provisions contained in Regulation SB of the Income-Tax Regulations and be paid in such foreign currency.

51. Notwithstanding any provision contained in sub-section (n) (1) of section 3 of the Income-Tax Law, if a resident foreigner earns any of the following types of income in foreign currency, the income-tax shall be paid at the rate of 15 percent on the total foreign currency earnings in such foreign currency: -

(a) income from renting building, room, vehicles, vessels and aircrafts, machineries and other properties;

(b) income under the head of salary;

(c) with the exception of a corporate body, the income received for service carried out as an agent, income under the head of profession, income from other services such as advisory and agency.

52. Notwithstanding any provision contained in sub-section (n) (1) and (2) of section 3 of the Income-Tax law, if resident Myanmar citizens and non-resident Myanmar citizens earn any type of income contained in sub-sections (a), (b) and (c) of section 51 in foreign currency, the income-tax shall be paid at the rate of 10 percent on the total foreign currency earnings in such foreign currency.

53. The provisions contained in sections 51 and 52 shall not be applicable to income earned from an enterprise carried out with a permit issued under the Foreign Investment Law. Provided that, the income-tax shall, in respect of income from an enterprise carried out with a permit issued under the Foreign Investment Law, be paid at the rate at which Myanmar citizens pay income tax on foreign currency earnings.

54. If a resident foreigner earns foreign currency from the sale of goods produced and from carrying out any business and any service, the income-tax on such earnings shall be calculated in accordance with the provisions contained in Regulation SB of the Income-Tax Regulations and be paid in foreign currency.

55. In the private and co-operative sectors, if the proceeds of sale from export in border trade between the Union of Myanmar and the People’s Republic of China, between the Union of Myanmar and the Republic of India and between the Union of Myanmar and Thailand are received in kyats, income tax equivalent to 2 percent of such total proceeds of sale shall be paid in kyats. Provided that, it shall not be applicable to the income from enterprises carried out with a permit issued under the Myanmar Citizens Investment Law.

56. If an enterprise carried out with a permit issued under the Myanmar Citizens Investment Law earns income in kyats, the income-tax shall be calculated and paid in accordance with the provisions contained in the Income-Tax law. If it earns income both in kyats and foreign currency, the income tax shall be calculated and paid in accordance with the provisions contained in Regulation SB of the Income-Tax Regulations.

The State Peace and Development Council, Multi-Party Democracy General Election Commission, Government, Chief Justice, Attorney General and Auditor General
Schedule (1)

The State Peace and Development Council, Multi-Party Democracy General Election Commission, Government, Chief Justice, Attorney General and Auditor General
Schedule (2)

Ministries and Departments
Schedule (3)

Ministries and Departments
Schedule (4)

State Economic Organizations
Schedule (5)

State Economic Organizations
Schedule (6)

Cantonment Municipalities
Schedule (7)

Cantonment Municipalities
Schedule (8)

(Sd.) Than Shwe
Senior General
Chairman
The State Peace and Development Council