As it seeks ways to ease its budgetary troubles, the military regime has announced plans for a two percent advance tax on the income of medical practitioners working privately at hospitals and clinics.
The “pre-tax”, which will apply to service fees charged by contracted doctors, nurses and pharmacists, is scheduled to go into effect on September 1, according to a public announcement made by the junta’s ministry of finance and planning on August 25.
Hospitals and clinics hiring the locum doctors, nurses, and pharmacists will be responsible for collecting the taxes in advance each year and submitting the sum to the Internal Revenue Department (IRD), according to the announcement.
The IRD will later deduct the pre-taxes from the individual medical practitioners’ annual taxes, the ministry’s statement said. The plan will not affect full-time staff members of the hospitals and clinics, who will continue paying taxes out of their monthly pay as before, but only the locum medical providers working at the facilities on a fee-for-service basis.
In Myanmar, citizens and residents are normally required to pay tax on personal income assessed at 4.8m kyat (US $2,300) per year or more after exemptions and deductions. Income is taxed at progressive rates up to 25 percent, with the maximum rate applying to annual incomes of more than 70m kyat (US $33,500).
A tax expert, who asked to remain anonymous, said that this plan to collect “pre-taxes” was part of an effort to resolve their military council’s financial struggles.
“This just highlights that the military council is broke,” he said.
One potential adverse consequence of the policy, according to the tax expert, is that hospitals and clinics will respond by raising the fees charged to patients.
“The hospitals could start asking for more money from the patients—or essentially, passing the tax on to the patients that they should be collecting from the doctors. This wouldn’t be right legally,” he added.
He added that this announcement was a sign that the military would start collecting more pre-taxes, possibly imposing the same scheme on entertainment and other industries.
A doctor in the Civil Disobedience Movement (CDM)—which formed in 2021 to organise strikes and protests opposing the February military coup—agreed that the income tax would likely be passed on to the patients.
“This will affect the patients, who have to pay out of pocket. The clinics are not going to take the loss,” he said.
Healthcare workers have become especially frequent targets of junta repression and arrests since many joined the CDM in strikes opposing the 2021 military coup. In addition, the regime pressured hospitals and clinics against hiring CDM doctors and nurses, even shutting down some medical centres in retaliation for employing former participants in the movement.
In protest against the 2021 military coup, some Myanmar citizens also initially refused to pay electricity bills and taxes, but were ultimately forced to pay them in arrears by the coup regime.
The coup led to many foreign companies’ cessation of operations in Myanmar, the loss of international development aid and loans, decreased export earnings and investment from abroad, and the imposition of sanctions by Western governments, leaving the military council facing major fiscal shortfalls and intently seeking new sources of revenue.
To cover its military budget—which totalled 5,600 billion kyat (US $2.7bn) for the current financial year—the regime has resorted to borrowing by selling treasury bonds to private banks owned by crony businessmen with close connections to the military.
