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Yangon starts new wheel tax collection system, but more reviews needed

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MPs who discussed new tax regulations under the Yangon taxation law during a regional parliament session yesterday agreed that more should be done to improve the system.

Yangon will this year start collecting wheel taxes based on engine power, deviating from its previous practice of collecting the tax based on vehicle weight.

“Last year, vehicle wheel tax was defined based on the type of car and its weight but this year, it will be based on engine power,” U Zaw Win Naing, MP from Latha township, said during a regional parliament session discussing Yangon’s new tax law yesterday.

The development comes after the new Yangon taxation law was submitted to the regional parliament on March 21 with updates to 38 existing regulations, including the collection of wheel tax. Before the changes, Yangon had been collecting the various taxes based on 1997 legislation, which is now insufficient to meet the city’s needs.

Under the new rules, vehicles owners will be taxed K36,500 for cars with 660 cubic centimeter (cc) engines, K54,750 for 661cc to 1300cc engines, K73,000 for 1,301cc to 2,000cc engines, K91,250 for 2,001cc to 4,300 cc engines and K109,500 vehicles with 4,301cc engines and above.

Although this will result in higher tax revenues for the Yangon regional government, which can be channeled towards building new roads, bridges and other transport infrastructure, the new wheel tax system has room for improvement, said U Yang Aung Min, MP from Shwe Pyi Thar township.

“In my opinion, the collection of wheel taxes can be further segregated between personal and commercial use,” he said.

The MP pointed out that some 2,000cc-3,000cc cars used for personal purposes are rarely driven. On the other hand, many 660cc Daihatsu Hijet vans are used on a daily basis to transport commercial goods.

“The Hijets are plying the roads everyday and contributing more to road deterioration. Yet, they pay much less wheel tax compared to the 2,000cc cars, which are driven only occasionally. The government should further review its new policy to account for this,” he said.

Taxes for encroaching

The MPs also agreed that the government should review its methods of collecting taxes on the use of public space for private means, such as placing power generators or stalls.

However, at K150 per square feet per year, the tax collected from these small businesses is the same as that collected from larger enterprises like hotels that build porches over public spaces, for example.

‘’K 150 is nothing for these big hotels and they don’t care. The YCDC (Yangon City Development Committee) should review this,” said Daw Kyi Pyar, MP from Kyauktada Township.

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