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Myanmar Businesses Want Lower Taxes
Myanmar Businesses Want Lower Taxes

Myanmar Businesses Want Lower Taxes

Myanmar Businesses Want Lower Taxes

Myanmar businesses are urging the government to lower the country’s tax rates to alleviate pressure from the rising dollar exchange rate and slowdown in demand in recent months.

According to the quarterly Business Sentiment Survey by the Union of Myanmar Federation Chamber of Commerce and Industry released last month, Myanmar’s high taxation rates are among the top reasons for the weakening economy, ATimes reported.

The survey, which revealed a 25% year-on-year drop in overall business confidence, also showed that three out of the five reasons for the lack of confidence in economic growth were related to taxation.

During a meeting between Aung San Suu Kyi in late August, business leaders, including UMFCCI chair Zaw Min Win and Shein Win, chair of the Myanmar Construction Entrepreneurs Association, urged the state counselor to reduce Myanmar’s existing tax and interest rates to draw more foreign direct investments.

The Directorate of Investment and Company Administration is expecting $5.8 billion in FDI in 2018-19, which is unchanged from the previous 2017-18 year ended March 31, during which Myanmar received $5.7 billion in FDI for 222 projects. In comparison, the country received $6.6 billion for 135 investments in 2016-17.

This is not the first time the business community is calling for a decrease in tax rates, which inhibits operations, especially for new companies. “When we start running a business, we have to invest in capital assets. But we also have to pay 30% tax for capital expenditure despite the fact that we haven’t even started doing business. So, we suggest reducing this tax to 5% for the first 1-2 years of starting a business,” said Maung Weit, a businessman present during the meeting.

 

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