The Myanmar government will start to enforce a 5 per cent commercial tax on telecoms services on 1 June.
According to the Ministry of Communications and Information Technology (MCIT), the tax, which was passed last year, has been selectively enforced due to a one-year exemption given to keep prices low as the telecoms sector got off the ground.
The exemption ended on 1 April.
Mobile customers will feel the tax mainly when they buy top-ups, as the price of SIM cards will stay at MMK1,500 ($1.35), but for an MMK1,000 top-up they’ll only receive MMK952 in value, with MMK48 going to the tax, the Myanmar Times said.
Telenor has applied the tax to its top-ups and paid the government, but hasn’t passed the cost on to consumers, the Times said. It will now stop subsidising the tax.
A Telenor representative told Mobile World Live that the tax law is broadly in line with international practices for the telecoms sector in other countries.
He noted that Myanmar’s ICT sector is growing and there is rapid adoption of telecoms and internet services, so “we see minimal impact in the medium to long term”.
Myanmar, which opened to foreign competition last year with the launch of mobile services by Ooredoo and Telenor, has seen mobile connections jump from one million to more than 18 million in just three years.
The price of a SIM has dropped from more than $200 just a couple of years ago to less than $2.