Social media users in the former junta-ruled nation also voiced dismay at the US magazine's July front page, which shows a photograph of controversial Mandalay monk Wirathu, whose anti-Muslim remarks have come under scrutiny following a wave of deadly religious violence.
The Time report "creates a misunderstanding of Buddhism which has existed for thousands of years and is the religion of the majority of our citizens," said a statement posted on the presidential office website last night.
In a sign of the strength of feeling, one online petition started over the weekend to condemn the magazine had collected almost 40,000 names by Monday.
The use of the words "Buddhist" and "Terror" upset all followers of the faith, which is peaceful "and not for terrorists," a message accompanying the petition said.
Facebook users accused Time of deepening divisions and defaming Myanmar's main religion.
"What Wirathu is doing now is to protect our own nationality and religion," the Facebook user wrote, urging the magazine to apologise.
"Obviously this writer doesn't understand Myanmar and Buddhism well," another post said.
Several episodes of religious fighting have exposed deep rifts in the Buddhist-majority country and cast a shadow over widely praised political reforms since military rule ended two years ago.
In March at least 44 people were killed in sectarian strife in central Myanmar with thousands of homes set ablaze.
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