Burmese Junta Cracks Down on Tax Evasion Cases

Burmese authorities are increasing the pressure o­n dozens of Rangoon businesses in an effort to prevent tax evasion, following similar actions earlier against the business community by the Ministry of Home Affairs' Bureau of Special Investigations.

Business sources in Rangoon told The Irrawaddy o­n Wednesday that authorities have detained some leading businessmen, including Maung Weik, the founder of Maung Weik & Family Co, and are conducting investigations into the financial records of various businesses.

Maung Weik gained prominence a decade ago and his company has since become the country's largest importer of steel and gilding glue. The exact number and location of the detained businessmen is not known.

Some of Rangoon's biggest companies, such as Max Myanmar, AA Pharmacy, the Peace Myanmar Group and International Beverage Trading, are among the businesses reportedly being targeted for investigation.

Rangoon sources noted, however, that other major enterprises which are close to the junta or operated by the relatives and cronies of military leaders, such as the Htoo Trading Company, owned by Tay Za, who is close to Snr-Gen Than Shwe, and Aye Yar Shwe Wa, owned by Aung Thet Mann, son of Gen Thura Shwe Mann, have not been affected by the crackdown.

The Rangoon-based weekly Pyi Myanmar quoted an official in the Finance and Revenue Ministry who said of 20,000 private companies an estimated 60 percent are believed to have evaded paying proper taxes.

"Companies failing to do so will be dealt with a fine of 50 percent of the tax amount or (businessmen) will be jailed for a term of three to 10 years," o­ne official said.

Burma's tax revenue was 400 billion kyats (US $325 million) in the 2005-06 fiscal year, "a significant increase over the previous years but much lower than targeted," according to Pyi Myanmar.

Since early last year, Burma’s military government has aggressively enforced a new tax policy and an improved tax collection procedure to try to gain better control of the economy.

A Rangoon source said the government's actions have prompted some businessmen to flee the country.