myanmar
The overall progress of tobacco tax policy implementation:
Relationship between tobacco
taxes, price and public health
The Government first introduced the Commercial Tax Law in 1990, considering a shift back to the Goods and Services Tax System that was initially established in 1976. In 2016, the Special Goods Tax (SGT) Law was enacted, changing the tobacco tax system from being purely ad valorem to a specific system with four tiers for cigarettes. The main objective was to increase taxes on all tobacco products, aiming to reduce tobacco use.
Structure of tobacco taxes
The current tobacco tax structure is a specific system with four tiers for cigarettes [2] (refer to the table below) under the SGT Law. The SGT is also applied to cheroots, pipe tobacco, cigars/cigarillos, smoking tobacco, and betel chewing preparations [3]. The Internal Revenue Department (IRD) determines the prices of tobacco products based on information provided by manufacturers and their own market surveys. These prices are subject to review by the IRD to establish appropriate tax rates [3].
Tax Rate on Cigarettes and other tobacco products under the Union Tax Laws, 2018 to 2024*
| No. | Description of Specific Goods | Market Price Level* | Specific Tax Rate (2018) | Specific Tax Rate (2020) | Specific Tax Rate (2021 to 2024)* |
|---|---|---|---|---|---|
| 1 | (a) Cigarettes of all sorts | Sale price of packet containing 20 sticks not exceeding 400 MMK (2016 & 2017) or 500 (2018), 600 (2020), or 700 (2021-24) | 4 MMK per stick | 9 MMK per stick | 10 MMK per stick |
| (b) Cigarettes of all sorts | Sale price of packet containing 20 sticks from 401 to 600 MMK (2016, 2017 & 2018), 601 to 800 MMK (2020), or 701 to 900 (2021-24) | 9 MMK per stick | 18 MMK per stick | 19 MMK per stick | |
| (c) Cigarettes of all sorts | Sale price of packet containing 20 sticks from 601 to 800 MMK (2016, 2017 & 2018), 801 to 1000 MMK (2020), or 901 to 1100 MMK (2021-24) | 13 MMK per stick | 23 MMK per stick | 24 MMK per stick | |
| (d) Cigarettes of all sorts | Sale price of packet containing 20 sticks from 801–900 MMK and above (2016, 2017 & 2018), 1001 MMK and above (2019), or 1101 MMK and above (2021-24) | 16 MMK per stick | 26 MMK per stick | 27 MMK per stick | |
| 2 | Cheroots | Cheroots 2018, 2020, 2021-2024 | 25 pya per stick | 0.80 MMK per stick | ONE MMK per stick |
| 3 | Tobacco Raw | 2018, 2020,2021-2024 | 60% | 60% | 60% |
| 4 | Virginia Tobacco | 2018, 2020, 2021-2024 | 60% | 60% | 60% |
| 5 | Cigars | 2018, 2020,2021-2024 | 80% | 80% | 80% |
| 6 | Piped tobacco | 2018, 2020,2021-2024 | 80% | 80% | 80% |
| 7 | Tobacco products for betel quid | 2018, 2020, 2021-2024 | 80% | 80% | 80% |
Note: *Note: Union Tax Law 2024, State Administrative Council Law 23/2024, 29 March 2024
Level of tax rates to apply
In 2017, tax rates were slightly increased, and a specific tax rate for cheroots was introduced with two pricing tiers. The Union Tax Law of 2018 further adjusted this, moving cheroots from a two-tier system to a single-tier specific tax rate of 25 pyar (0.25 MMK) per stick. Other products continued to be taxed at specified rates based on retail prices, with some adjustments. Retail prices for each specific product were set by an IRD committee in accordance with procedures outlined in the SGT Law [1]. From 2021 to 2024, the tax rates have remained unchanged. Tobacco taxes account for approximately 30-60% of retail prices [1], with tax rates for other tobacco products being significantly lower than cigarettes.
Comprehensiveness/similar tax burden for different tobacco products
The government does not tax all tobacco products in a uniform way. Hand-rolled products like cheroots and cigars, as well as smokeless tobacco products, are taxed less than cigarettes, which could encourage consumers to shift to these cheaper alternatives in response to tax increases. According to the 2008 Myanmar Constitution, the Union Parliament must pass the annual Budget and Union Tax Law, with both the upper and lower houses reviewing and revising tax systems and rates as necessary.
Authorization/licensing
Myanmar has a licensing system for the manufacture of tobacco products and related equipment, as well as for the import and export of tobacco products. The SGT Law also mandates that all entities involved in the production and sale of products listed in the Law must register and obtain licenses as tax payers [1]. However, no license is required for retailing tobacco products, transporting commercial quantities, wholesaling, brokering, warehousing, distributing tobacco products, or manufacturing equipment.
Warehouse system/movement of excisable goods and tax payments
Myanmar has banned the importation of cigarettes, but permits the import of raw tobacco and other materials used in the production of cigarettes and cigars. Duty-free cigarettes are allowed for sale to tourists and passengers at international terminals. However, Myanmar has not yet implemented a bonded warehouse system to store and control the movement of excisable goods, including those for taxation purposes.
Anti-forestalling measures
Myanmar does not currently have anti-forestalling measures in place.
Fiscal markings
Since April 2021, Myanmar has introduced new tax stamps for all tobacco products, primarily cigarettes, cheroots, and cigars. These stamps include QR codes for tracking and tracing to improve tax administration [1]. However, these tax stamps are not yet applied to other tobacco products.
enforcement
Enforcement actions are carried out under the SGT Law [1], as well as the Union Tax Law and the Income Tax Law.
Use of revenues – financing of tobacco control
Currently, there is no policy in place to allocate tobacco tax revenues specifically for funding tobacco control initiatives.
Tax-free /Duty-free sales
Duty-free cigarette imports are permitted for hotels and international airport terminals, under licenses from the Ministry of Hotels and Tourism. International travelers to Myanmar are also allowed to bring duty-free cigarettes (up to 400 sticks), 100 cigars, or 250 grams of pipe tobacco.
Protection of tax policies from vested interests
The government has not yet implemented WHO FCTC Article 5.3, which aims to protect tax policies from the influence of vested interests of the tobacco industry.
REFERENCES
[1] Tobacco Use, Tobacco Industry and Tobacco Taxation in Myanmar. Ministry of Health, 2024.
[2] Myanmar Cigarettes, Global Data, October 2020.Â
[3] Myanmar. Overview of Tobacco Use, Tobacco Control Legislation and Taxation. World Bank, 2019.Â