Penetration passes 50%, govt postpones 5% telecom tax

4 Jun 2015

Cellular penetration in Myanmar has surpassed 50%, with the number of mobile subscribers passing the 28.1 million mark by the end of March 2015, the Myanmar Times cites Ministry of Communications and Information Technology (MCIT) permanent secretary U Khin Maung Thet as saying. State-backed incumbent Myanmar Post and Telecommunication (MPT) represented the lion’s share with 18.4 million users, compared to the 6.4 million and 3.3 million claimed by its Norwegian and Qatari-backed rivals, Telenor and Ooredoo, respectively. Cellular penetration was 54.6% at that date, compared to 32.9% twelve months earlier according to the official.

The announcement follows on the heels of parliament’s suspension of a planned 5% tax on mobile services. The levy was due to be implemented on 1 June this year, when a one-year exemption on the fee was due to expire, but parliamentary opposition has seen the tax pushed back another year. MPs argued that the tax should be postponed until coverage and service quality are improved, and suggested that the charge should be introduced at a lower rate, of 1%-2% and gradually increased to 5%. One official, U Tin Maung Win was quoted as saying: ‘People are now using MPT, Telenor and Ooredoo SIM cards, but these do not work in rural and remote areas, and they cannot provide a sufficient service to customers. I want them to collect tax, but only if they can provide an adequate service.’ For their part, MCIT and finance ministry officials pointed out that the tax would help fund the requested improvements, garnering around MMK84 billion (USD78.38 million) per year for government coffers – not accounting for any increases in subscriber numbers or spending. Further, it was noted that other nations collect indirect taxes on mobile services of 6%-20%.