Posts in category: ECONOMY

Although the majority of developing countries levy the sector-specific tax in addition to regular commercial tax for internet services, Myanmar does not collect the sector-specific tax till today. In order to recover the businesses, which face loss in impacts of COVID-19, the government carries out easing and postponing the tax collection.

However, as the use of internet services is on the rise across the nation, levying commercial tax over the consumption of internet services can increase the income for the State. On the other hand, the effects triggered by extreme use of internet services on the employment of the people and physical and mental sufferings of new generation students can be reduced.

The commercial tax will not be increased for calling and use of SMS. Arrangements will be made for easing the necessary restrictions for taxpayers who use the internet for the development of human resources and knowledge about health measures in levying the increased rate of commercial tax over the internet services. On one hand, efforts will be made for providing better quality service and network coverage for the users. The Union Tax Law 2021 was amended with a plan to levy the increased commercial tax.

Source: The Global New Light of Myanmar

Republic of the Union of Myanmar
State Administration Council
Law Amending the Union Tax Law 2021
State Administration Council Law No. 1/2022

5th Waxing of Pyatho 1383 ME
6 January 2022

The State Administration Council hereby promulgated this law under Section 419 of the Constitution of the Republic of the Union of Myanmar.

1. This law shall be named “the Law Amending the Union Tax Law 2021”.
2. This law shall be affected from 8 January 2022 to 31 March 2022.
3. Sub-Section (e) of Section 14 of the Union Tax Law 2021 shall be substituted as follows:-
   “(e). Five per cent of commercial tax shall be levied over the income of other services being operated at home, except services mentioned in the Sub-Section (d) and Sub-Section (e-1).”
4. The following section shall be inserted as Sub-Section (e-1), under Sub-Section (e) of Section 14 of the Union Tax Law 2021:-
   “(e-1) (1) No matter what provisions the Commercial Tax Law comprises, only once commercial tax shall be levied K20,000 per the sales of SIM cards and SIM card activation.”
   (2) Fifteen per cent of commercial tax shall be levied over the income
   earned from the internet services.”
5. The table of Sub-Section (a) of Section 25 of the Union Tax Law 2021 shall be substituted as follows:-

I hereby signed it under Section 419 of the Constitution.

Sd/Min Aung Hlaing
Senior General
Chairman
State Administration Council

Source: The Global New Light of Myanmar

The Central Bank of Myanmar (CBM) sold US$443.8 million at its FX auction rate to the authorized dealers in the past 11 months (February-December) 2021, according to the auction results released by the CBM. Consequently, the exchange rate was pegged at around K1,700-1,800 in December-end, according to the CBM. In a bid to strengthen the
local currency and govern the market volatility, the CBM reportedly sold about 6.8 million dollars on 3 February 2021, $12 million in April, $24 million in May, $12 million in June, $39 million in July, $28 million in August, $63 million
in September, $110 million in October, $31 million in November and $118 million in December in the auction market.

The CBM trades the foreign currency with the authorized private banks under the rules and regulations of the FX auction market. The currency intervention is required to steer the own currency value. It is one of the responsibilities of the CBM to control the price. This is why the CBM practised the foreign exchange intervention. Additionally, the use of Yuan or Kyat in the bilateral transaction is officially allowed in the border areas between Myanmar and China in a bid to encourage the trade, according to the notification released by the Central Bank of Myanmar on 14 December, in the exercise of the power conferred by Sections 17 and 22 of the Foreign Exchange Management Law.

This move is aiming to boost the bilateral cross-border trade, facilitate the trading and bilateral transaction and increase the use of domestic currency in line with the objectives of ASEAN Financial Integration. The local forex market’s data showed that the dollar exchange rate touched the maximum of K1,345 and the minimum of K1,327 in January 2021. The rate moved in the range of K1,335-1,465 in February. It reached the lowest of K1,420 and the highest of K1,550 in March. The rate fluctuated between K1,550 and K1,610 in April. The rate fluctuated between K1,585 and K1,730 in May and it moved to the maximum of K1,595-1,620 last month.

The local forex market’s data showed that the dollar exchange rate touched the maximum of K1,345 and the minimum of K1,327 in January 2021. The rate moved in the range of K1,335-1,465 in February. It reached the lowest of K1,420 and the highest of K1,550 in March. The rate fluctuated between K1,550 and K1,610 in April. The rate fluctuated between K1,585 and K1,730 in May and it moved to the maximum of K1,595-1,620 in June. The rate stood at K1,626-1,670 in July. It hit the lowest of K1,660 and the highest of K1,682 in August. The rate edged up to K3,200 and fell to K1,696 in September. In October, it stayed between K2,430 and K1,830. The rate was pegged around K1,700-1,800 in November and December.

Source: The Global New Light of Myanmar

According to Nikki Asian, Telenor will sell 51% of Wave Money to Thein Wai’s Yoma Company. In Wave Money, Telenor owns 51% and Yoma Strategic Holdings holds 49%. According to Nikki Asian, Telenor has received $ 53 million worth of shares for sale, valued at $ 104 million, which is higher than the $ 105 million it earned when it sold the telecommunications business. “Wave is a good business and Yoma needs to buy it. They (Telenor) have no choice if they do not want the shares to be owned by another business. 

It is in line with Yoma Bank’s efforts to develop the retail sector and the growth of digital financial services, ”a market expert quoted Nikki Asian as saying. If the final acquisition is successful, Yoma will own up to 75 per cent of the money in the future, with the remaining 25 per cent likely to be owned by private investors at the Yoma-led company, according to the report. Following the political upheaval in Myanmar, Telenor plans to sell its telecommunications business in Myanmar to the M1 Group, which is owned by a Lebanese millionaire. 

However, the Burmese government has not yet given permission. As a result, it is planning to sell its stake in Wave Money while waiting for approval, the report said. The transfer is scheduled to take place in the middle of this year, but neither company has been able to confirm the news, according to Nikki Asian. Nikki Asian has announced that Wave Money has been separate from Telenor since it planned to sell its telecommunications business to the M1 Group. Wave Money will provide regular services to millions of customers. Wave Money said in a statement in July 2021 that the business was operating normally and that commitments to Myanmar would remain strong.

Source: Daily Eleven

The domestic gold price has mounted to K1,823,000 per tical (0.578 ounces or 0.016 kilogrammes) on New Year Eve, according to the domestic gold market. The price of domestic gold is on the rise right now because of the rising of the international gold market and the US dollar exchange market. Currently, the US dollar exchange rate is fixed at around K1,900 per dollar in the foreign market, while the international gold gained US$1,829 per ounce. The domestic gold price is positively linked to the international gold price and US dollar exchange rate.

The pure gold price was up to K2,220,000 per tical in September in the domestic market, while the US dollar exchange rate touches a high of above US$3,000 per dollar. Last September, there has been a lot of demand in the gold market due to the depreciation of the kyat against the dollar, hence the gold purchase orders were accepted in an appointment system. Besides, the shops are urged to sell only small pieces of gold bar. The association is also monitoring to stop accepting orders without raw gold material and to stop distance trading.

In January 2021, the gold price was ranged between the minimum of K1,316,000 per tical (28 January) and the maximum of K1,336,000 per tical (6 January). It reached an all-time high of K1,410,000 per tical on 3 February and hit the minimum of K1,340,000 per tical on 2 February. In March, the rate fluctuated between the highest of K1,391,000 (25 March) and the lowest of K1,302,000 (4 March). The price has registered the highest of K1,455,000 (30 April) and the lowest of K1,389,000 (1 April). The price reached an all-time highest of K1,709,000 (12 May) and the lowest of K1,447,000 (3 May).

The price moved in the maximum of K1,575,500 (11 June) and the minimum of K1,543,000 (19 June). Last month, it fluctuated between K1,562,300 (26 Jul) and K1,587,000 (9 July), the gold traders said. According to gold traders, the price of gold reached the lowest of K1,572,800 (3 August) and the highest of K1,698,000 (31 August). The local gold reached the lowest level of K1,703,500 (1 September) and the highest level of K2,220,000 (28 September). In October, the rate ranged between 1,750,00 (27 October) and K2,030,000 (1 October). The rate fluctuated between the highest of K1,810,000 (6 November) and the lowest of K1,768,500 (24 November). In December, the pure yellow metal price moved in the range of 1,768,500 (6 December) and 1,823,000 (29 December).

Source: The Global New Light of Myanmar

The Central Bank of Myanmar (CBM) sold US$15 million at an auction market rate this month on 23 December for the sixth time, according to figures released from the CBM. The bank sold $15 million at an auction market rate of K1,778 per dollar, it is learnt. The CBM reportedly sold $15 million on 3, 15, 17 and 22 December and $13 million on 9 December, bringing the total number of sales to $88 million during December. Currently, the dollar exchange rate against Myanmar kyat stood at around K1,900 per dollar in the domestic US exchange market, according to the currency exchange counters.

Consequently, the CBM is conducting an auction for foreign exchange to reduce the sudden fluctuation of foreign exchange rates. Besides, the Central Bank of Myanmar (CBM) issued the instruction on 9 November that the foreign exchange transitions must be carried out within ± 0.5 per cent of the reference rate established by the CBM. The dollar exchange rate against Myanmar kyat stood at around K1,330 per dollar at the end-January. Then, the dollar’s value reached the highest of over K3,000 per dollar in history last September-end.

The local foreign exchange market’s data in 2021, the highest and the lowest exchange rate is currently fixed around K1,327-1,345 in January, K1,335-1,465 in February, K1,420-1,550 in March, K1,550-1,610 in April, K1,585-1,730 in May, K1,595- 1,620 in June, K1,626-1,670 in July, 1,660-1,682 in August, K1,696-3,200 in September, K1,850-1990 in October and K1,773-1,880 in November. In 2020, the exchange rate moved in the range of K1,465- 1,493 in January, K1,436-1,465 in February, K1,320-1,445 in March, K1,395-1,440 in April, K1,406-1,426 in May, K1,385-1,412 in June, K1,367-1,410 in July, K1,335-1,390 in August, K1,310- 1,355 in September, K1,282- 1,315 in October, K1,303-1,330 in November and K1,324-1,403 in December.

Source: The Global New Light of Myanmar

The Central Bank of Myanmar (CBM) has not responded to the request submitted by Yangon Region Gold Entrepreneurs Association (YGEA) to resume the Telegraph Transfer (TT) system for gold export and import transaction, said U Myo Myint, chair of YGEA. At present, gold export has come to a stop after the international remittance for the gold transaction was changed from Telegraph Transfer (TT) to Letter of Credit (LC), he added. “Gold export is not going well. Only through the TT system, the trade will go smooth.

As the transaction is permitted only with LC, the trade is completely halted. We have requested the CBM regarding that matter. The officials said they will proceed with it. Yet the official notification of the resumption of the TT is not released. We will be connected again to the international market upon the TT system,” U Myo Myint elaborated. As per the notification released by the Ministry of Commerce on 12 August 2020, the transaction for gold export and import can be done only with the LC system. Myanmar is placed on the Grey List by the Financial Action Task Force (FATF), the inter-governmental body that sets anti-money laundering standards.

Therefore, the country needs to monitor the gold and jewellery exports and imports in order to ensure there is no illegal income. As per the notification released by the Trade Department, the payment method was changed to LC. The payment using LC can take about two months, cost banking service changes by two sides, and increase the charges for security matter in transport. Consequently, gold trading in the international market has also stalled due to volatile prices, YGEA stated. The suspension in gold export left more than 10,000 goldsmiths unemployed. The domestic gold market might recover if the resumption of the TT system is permitted. Gold and other pieces of jewellery are primarily purchased by Japan and the Republic of Korea, and other tourists also buy them, the YGEA stated.

Source: The Global New Light of Myanmar

According to the Customs Department, the tariff rate for 23 pharmaceutical raw materials will be reduced from the current 3% tariff rate to zero% from December 13, 2021 to March 31, 2022. Ministry of Planning and Finance Control It is a product that is really needed in the production of medical drugs and can be produced locally in large quantities.

In order to protect the production of domestic medicines and facilitate the easy purchase of local medicines, the tariff rate of 23 pharmaceutical raw materials in Chapter (29), Appendix 29 of Myanmar Customs List (2017) has been reduced from the current tariff rate of 3% to zero tariff from 13 December 2021 to 31 March 2022.

Therefore, the promulgation date for the effective date of the promulgation date of the promulgation date of the promulgation date is October 3, 2021 to March 31, 2022 20 March 2021 20 March 2021 to apply for the Customs Duty Exemption Code as the Customs Duty Exemption Code for COVID-19. If less / more is collected, the return and re-collection process will be contacted to the relevant divisions. MACCS Branch issued Notification No. (15/2021).

Source: Daily Eleven

The Myanmar Investment Commission (MIC) has issued Notification No. 26/2021 dated December 20, 2021, stating that businesses operating with the approval and approval of State and Region Investment Committees must apply directly to the Department of Commerce and Customs Department from December 15, 2021, without the need for commission approval under Myanmar Investment Rule 230.

The Myanmar Investment Commission (MIC) has issued this notification to facilitate investment activities by exercising the authority conferred under Section 100 (b) of the Myanmar Investment Law. Investments include business-related equipment; The following must be followed when importing business equipment and raw materials.

Myanmar Investment Commission and Regions; Permission of State Investment Committees; From December 15, 2021, applications must be submitted directly to the Department of Commerce and Customs under the Myanmar Investment Rule 230, without the need for commission approval, except for the import of raw materials for liquor, beer, cigarettes, motor vehicles, motorcycle assembly and import of commercial sugar under the Myanmar Investment Rule 230. The Myanmar Investment Commission (MIC) has announced that the annual raw material requirements of the motorcycle assembly industry and the import of commercial sugar, alcohol, beer, cigarettes and motor vehicles must be submitted to the Myanmar Investment Commission on an annual basis.

Source: Daily Eleven

Central Bank of Myanmar
Notification No 48/2021
11th Waxing of Nadaw 1383 ME
14 December 2021

1. The Central Bank of Myanmar has issued this proclamation exercising its authority under Sections 17 and 22 of the Foreign Exchange Management Law.
2. To increase Sino-Myanmar trade and facilitate the flow of goods, Yuan/Kyat direct payments were allowed on the Sino-Myanmar border to facilitate the two countries’ payment and clearing systems and to increase domestic currency in line with the objectives of ASEAN Financial Integration.
3. Designated banks have been allowed to open yuan accounts of importers and exporters for cross-border trade.
4. Therefore, the designated banks are required to adhere to the Guidelines for the Direct Use of Yuan/Kyat in Sino-Myanmar border trade.
5. This notice shall take effect from the date of issue.
   

Than Nyein
Governor
Central Bank of Myanmar