New in­vest­ment law re­moves tax breaks

The Myanmar Times - - Front Page - HTIN LYNN AUNG htin­lyn­naung@mm­times.com

Projects reg­is­tered with MIC will no longer au­to­mat­i­cally re­ceive a fiveyear tax ex­emp­tion un­der the new Myan­mar In­vest­ment Law – which could be a deal-breaker for com­pa­nies.

COM­PA­NIES in­vest­ing through the Myan­mar In­vest­ment Com­mis­sion will no longer au­to­mat­i­cally re­ceive a five-year tax break, but will be granted ex­emp­tions based on the na­ture of the project and its ge­o­graphic location, MIC sec­re­tary U Aung Naing Oo said yes­ter­day.

The changes will come into ef­fect when the new Myan­mar In­vest­ment Law is passed, he said. The law will con­sol­i­date the ex­ist­ing For­eign In­vest­ment Law and the Myan­mar Cit­i­zen’s In­vest­ment Law and, in the­ory, will cre­ate a level play­ing field for lo­cal and for­eign in­vestors.

Un­der both ex­ist­ing laws, in­vest­ments ap­proved by the com­mis­sion are tax-ex­empt for five years, but this clause has been re­moved in the new law, U Aung Naing Oo said at a press con­fer­ence in Yangon.

“The pro­vi­sion was aimed at en­cour­ag­ing more for­eign in­vest­ment, but we need to con­sider whether it is suit­able for some in­vest­ments, so we plan to amend it,” he said.

In­vestors will be granted dif­fer­ent lev­els of ex­emp­tion de­pend­ing on the type of in­vest­ment and its location, he said. Busi­nesses re­lat­ing to al­co­hol and cig­a­rettes will no longer be tax-ex­empt.

“If a busi­ness is re­ally good for the coun­try, it will not have to pay taxes for seven years or more. This amend­ment means com­pa­nies are not au­to­mat­i­cally granted tax breaks just be­cause they in­vest through the com­mis­sion,” he said.

Busi­nesses will be ranked from 1 to 3 ac­cord­ing to the role they can play in de­vel­op­ing the econ­omy. Busi­nesses in pri­or­ity sec­tors, ranked 1, will be most likely to get tax breaks.

A draft of the Myan­mar In­vest­ment Law has been sub­mit­ted to the pres­i­dent and the Union gov­ern­ment for re­view, he said. It is also avail­able on the Direc­torate of In­vest­ment and Com­pany Ad­min­is­tra­tion web­site.

– Trans­la­tion by Thiri Min Htun

Photo: Nyein Su Wai Kyaw Soe

MIC sec­re­tary U Aung Naing Oo ad­dresses a press con­fer­ence in Yangon.

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