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November 13, 2019

Automobile manufacturing body seeks tax cuts for SKD truck, bus producers

The Myanma Automobile Manufacturer and Distributor Association (MAMDA) has asked the authorities to slash the tax levied on manufacturers of Semi-Knocked Down (SKD) and Completely Knocked Down (CKD) trucks and buses. It has also asked the government to give priority to locally produced SKD, CKD cars in government bids.

Workers assembling a mini bus at Daewoo Bus Myanmar Factory in Mingaladon Township, Yangon.  Photo: Kyaw Zeya

MAMDA Vice President U Zaw Htike Aye and Joint Secretary Dr Kyaw Kyaw Aung made the request at the 30th regular meeting of Vice President U Myint Swe with entrepreneurs, held on Saturday at the Republic of the Union of Myanmar Federation of Chambers of Commerce and Industry.
“Although foreign investors have entered Myanmar’s automobile manufacturing industry, most of them are producing only family cars. Fewer trucks and buses are being manufactured. There is no difference in the tax levied on imported CBU (Completely Built Up) cars and SKD vehicles,” according to the association.
Therefore, the MAMDA has asked the government to reduce commercial and customs tariffs on locally produced SKD and CKD trucks and buses.
The association has also sought the establishment of industrial zones for SKD and CKD vehicle production.
While brand new cars that can be purchased on installment plans are popular among buyers, cars with right-hand drive are registering a strong trade and fetching high prices.
The Yangon Vehicle Quota Certificate (YVQC) system has been discussed by the vehicle import supervisory committee, and it has been forwarded to the authorities. Car dealers are hoping for a possible return of the YVQC in the market.
Right-hand drive cars are still garnering more trade amid news of the YVQC, with prices ranging between K20-68 million, depending on the model year. Vehicles assembled locally under the SKD system and which can be purchased under installment plans rank second in terms of trade, according to a car dealer.
At present, the new auto market is also booming, and some buyers have shown interest in buying locally assembled CKD and SKD vehicles. Eighteen companies have been permitted to produce cars under the CKD and SKD systems so far.
The Myanmar Customs Department has been collecting a lower customs tariff on double cabs by changing their HS code and considering them as commercial vehicles, while the Road Transportation Administration Department has categorized them as family cars for tax purposes. Therefore, the association has asked that a specific tax be set for them under the commercial vehicle category. —Ko Khant

(Translated by Ei Myat Mon)

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