Myanmar’s junta raised its commercial tax on internet services on January 8, with the new policies in place until at least March 31. It will mandate a tax of MMK 20,000 (USD 11) on each sale of a SIM card, as well as a 15% tax over the revenue gained from the internet services, according to an announcement published by Global New Light of Myanmar, a state-run newspaper, on January 7.
Before the tax levy, a SIM card cost at least MMK 1,500 (USD 0.84). The raised price may make new SIM cards unaffordable for many people in the country, given that the daily minimum wage for workers in Myanmar is currently MMK 4,800 (USD 2.70).
“The junta has recently increased the floor price for data usage, and this tax slaps a further cost on operators and users,” Yangon-based business journalist Thompson Chau said to KrASIA.
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The new tax rules were announced nearly one year after the coup took place on February 1, 2021. Shortly after taking control of the country, the military implemented a series of internet shutdowns and ramped up mobile surveillance to restrict the flow of information. Fixed-line internet connectivity in Myanmar resumed on April 28, according to accessnow.org, although recent reports indicate there have been other internet cuts affecting 25 cities and towns.
“As the use of internet services is on the rise across the nation, levying commercial tax over the consumption of internet services can increase the income for the state,” the government said in Global New Light of Myanmar.
Myanmar’s economy is expected to contract 18% this year due to ongoing political turmoil and a deadly third wave of COVID-19 infections, according to a World Bank report published in July 2021. In all, 1.2 million people in the country lost their jobs in the second quarter of 2021, according to the International Labor Organization.
Chau says that the new tax is another step for the government to reduce peoples’ internet access.
State-run businesses have been a target of nationwide boycotts. For instance, Mytel, a telecom business that is partly owned by Star High, a subsidiary of the military conglomerate Myanmar Economic Corporation, lost around 2 million subscribers between February and April 2021, costing the telco at least USD 24.9 million, according to data compiled by Justice for Myanmar, a rights group.
The new tax may be an attempt to replenish the junta’s coffers.
Internet restrictions and surveillance are hitting consumer and investor confidence hard, Chau said. “Another impact is that the tax raises the cost of obtaining new SIM cards. The military government has wanted to increase traceability of SIMs and will achieve this by raising entry cost,” he added, citing sources in local telecommunications companies.