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August 12, 2020

MIC describes export-oriented investments, grant tax exemption


The Myanmar Investment Commission announced on Sunday that it would consider businesses as 100 per cent export-oriented investments if investors supply all their finished goods and semi-finished goods locally manufactured to local businesses which are 100 per cent export oriented without supplying the domestic market.
The distinction is important, because such total export-oriented investments can apply for tax exemption or relief in accordance with the section 77 (b) of Myanmar Investment Law, according to this announcement. According to section 77 (b) of Myanmar Investment Law, exemptions or relief are granted from the customs duty or other internal taxes or both on the importation of the raw materials and partially manufactured goods conducted by an export-oriented business for the purpose of the manufacture of products for export. According to section 100 (B) of Myanmar Investment Law, those currently operating enterprises without seeking approval or endorsement of MIC can submit endorsement applications in line with Myanmar Investment Law. Even if those enterprises are endorsed by MIC, they are not allowed to apply for income tax exemption embodied in section 75 of Myanmar Investment Law. However, the announcement stated that those enterprises are allowed to apply for tax exemption and tax relief represented in section 77 (B), (C) and (D) of Myanmar Investment Law. There were many local businesses who did not seek approval from MIC, as Myanmar Investment Law is far beyond their understanding. They lost tax break opportunities under the law and lag behind those permitted by the MIC. Thus, the MIC is conducting tax exemptions or relief within the existing investment law framework. MIC announced on 10 October that investors can apply for tax exemption or relief.
Section 77 (C) stated that they can also enjoy reimbursement of customs duty or other internal taxes or both on imported raw materials and partially manufactured goods which are used to manufacture products for export. In accordance with the Section 77 (D) of Myanmar Investment Law, if the volume of investment is increased with the approval of the Commission and the original investment is expanded during the permitted period of investment, exemptions or reliefs from the customs duty or other internal taxes or both on machinery, equipments, instruments, machinery components, spare parts, materials used in the business, and construction materials unavailable locally, which are imported as they are actually required for use in the business which is being expanded as such increases may be granted.


Htet Myat



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