ASEAN Market Watch: Tax Evasion in Myanmar, Thai Growth Analysis, and Mobile Monitoring of Food Stocks in Indonesia
Myanmar: Government Plans Policy to Pursue Tax Evaders
Myanmar’s Internal Revenue Department plans to implement a policy that will increase taxes and penalize tax evaders. Government officials have stated that over several years tax evaders have not been penalized. The department has now approached the relevant ministries to find ways to prosecute such evaders. Tax authorities are presently collecting taxes that have not been paid in years. With more foreign investment in the country, companies are reminded to keep a track of their activities and file taxes to avoid penalties for non-compliance.
Companies that are found to evade tax will face a monetary penalty of not more than 10 percent of the tax, detainment for questioning, or prosecution as prescribed under the Income Tax Law. Similarly tax evaders will face a penalty of not more than 10 percent of the tax, imprisonment, and/or a US $85 (Ks 100,000) under the Commercial Tax Law. Under the Law for Special Goods, tax evaders will be penalized US $4,257 (Ks 5 million) and the goods will be kept for public welfare. Myanmar collected over US $3 billion (Ks 4 trillion) in taxes in 2014-15. Around US $1.7 billion (Ks 2 trillion) has been collected in the first half of the 2015-16 fiscal year.
Indonesia: Mobile App to Monitor Food Stocks
Indonesia’s National Economic and Industry Committee (KEIN) is developing a mobile app to collect information on food production and stock levels directly from farmers, distributors, storage centers and markets across the country to give the government more timely and accurate data. The app, will be named as Logistik Tani or Farmer’s Logistics and is being developed by state-controlled Telekomunikasi Indonesia (Telkom).
Analysts indicate that data collected by the Ministry of Agriculture and the Central Statistics Agency (BPS) often conflict with the actual reality as prices of rice, corn and beef regularly spike despite good harvests and an adequate stock. This in turn affects the government decision on whether to import such staple food products. Data collected by the app will be displayed at KEIN’s office in Jakarta giving the government access to the information. Farmers will also be able to make real-time inputs on crop, livestock and any other relevant data. KEIN – the newly formed government agency support’s the government plan to boost the country’s manufacturing sector. If successful, an app like this could also work for other countries like India where inefficient storage and transport lead to food shortages.
Thailand: Economic Growth to Remain Steady
Thailand’s economy is expected to grow at 2.5 percent this year due to the fiscal stimulus and tourism revenue according to the World Bank. While steady, the GDP figure remains the lowest among other ASEAN countries excluding Brunei and Singapore. Analysts have stated that implementation of public infrastructure projects for this year and next will contribute to better economic climate. The World Bank in April had revised GDP growth from 2 to 2.5 percent due to state stimulus measures implemented last year and improving exports.
The extended economic slowdown resulted in challenges related to implementing public investment, maintaining and raising export competitiveness and addressing critical skill mismatches. In order for the economy to grow on a long term basis, implementation of reforms is necessary. Nevertheless, GDP growth is not expected to grow more than 3 percent in 2018. Thailand’s workforce is ageing which is expected to affect the economy in the next five years. The working age population is expected to decrease by 11 percent by 2040 from around 49 million to 40.5 million as per the World Bank. Enhancing labor productivity will be imperative to address this shortfall. Foreign investors should take note of these key changes and plan accordingly.
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