Posts in category: ECONOMY

8th Waxing of Nayon 1383 ME
17 June 2021

The State Administration Council hereby enacted the law in accord with Section 419 of the Constitution of the Republic of the Union of Myanmar with the aim of resurging delayed businesses and investments based on the Coronavirus Disease 2019 (COVID-19).
The law shall be named the Law Amending the 2020 Union Tax Law.
The law shall come into effect from 1 July 2021 to 30 September.
The table mentioned in Sub-Section (a) of Section 25 of the 2020 Union Tax Law shall be substituted as follow:

I signed it in accord with Section 419 of the Constitution-

Sd/Min Aung Hlaing
Senior General
Chairman
State Administration Council

Source: The Global New Light of Myanmar

According to the Internal Revenue Department, sale or exchange value of one or more assets does not exceed 100 lakh kyats, there is no need to pay income tax even if the capital is profitable. If one want to clarify tax matters concerning buying and selling of cars, it is needed to carried out setting vehicle standards, submission of declaration and tax payment procedures. In case of setting vehicle standards, registration of domestic vehicles and change of owner’s name in connection with tax assessment, it is needed to contact the relevant township Revenue Department offices in the township where the taxpayer resides. In the case of importing vehicles from abroad, it is also needed to contact the Office of the Income Tax Collection for the import of motor vehicles in Yangon, Mandalay and Nay Pyi Taw.

If the taxpayers want to carry out buying/selling of vehicles; and changing the names of owners, they can submit the income declaration to the relevant township tax office where they live and submit the source of income for the purchase. If the source of income is not presented, the income tax will be paid in accordance with the tax rates in Section 25 of the Union Tax Law of 2020. In the case of selling vehicles, they have to submit the income declaration to the relevant township tax office where they live within 30 days from the date of transfer of the property and estimate the tax. According to the 2020 Union Tax Law, income tax is levied at a rate of 10% on the value of the original purchase price and the additional costs incurred in the transfer of the property. 

In selling of one or more assets per year, Income tax is not needed to be paid even if the total value of the property to be exchanged or transferred is not more than 100 lakh kyats. According to the original estimate, the Union tax collection in the 2020-2021 fiscal year is expected to reach over 8615.777 billion kyats. If we look at the annual tax collection of the Union, in the 2011-2012 financial year it was 1691429.766 million kyats, in the 2012-2013 financial year it was 3373296.761 million kyats, in the 2013-2014 financial year it was 4458776.335 million kyats. 6517979.368 million in the 2014-2015 financial year; 6314733.657 million in the 2015-2016 financial year; 7122430.228 million in the 2016-2017 financial year; 7423724.984 million in the 2017-2018 financial year; In the six months from April to September 2018, 3424206.832 million kyats; In the 2018-2019 financial year, it received 8360303.568 million kyats.

Source: Daily Eleven

The Internal Revenue Department (IRD) has announced that the sale and purchase of real estate must be assessed within one year after the current valuation, and if it is assessed for more than one year, it will be re-assessed according to the current valuation standards. It is needed to clarified current valuation, submission of declaration, tax payment procedures in purchasing and constructing, and selling of real estate and buildings.

If the purchasing, constructing, and selling property is located within the townships in Yangon and Mandalay Regions, the current valuation can be proceeded by contacting relevant Regional Valuation Committee, and if the place is located outside Yangon and Mandalay Development Zones, one should contact relevant township valuation committee to get the current valuation. Tax assessments must be made within one year of the valuation period. Failure to submit the tax assessment within one year of the valuation period will automatically cancel the assessment, and if the tax assessment period is more than one year, it will be revalued under current valuation standards.

For those taxpayers who purchase, construct and sell real estate and building, taxes related to purchase/construct/sell can be paid by submitting income statement to the relevant township tax office where the property is located. If it isn’t able to submit the income statement, tax will be paid in accordance with the tax rates in Section 25 of the Union Tax Law of 2020 with the stamp duty on the fixed value. If one want to sell the land or building, that person must submit the income tax return to the relevant township tax office where the property is located or within 30 days from the date of transfer of the property and estimate the tax. According to the 2020 Union Tax Law, income tax is levied at 10 percent of the proceeds, plus the original purchase price and the costs incurred in transferring the property over a specified period of time.

Source: Daily Eleven

The annual rate of inflation in Myanmar, based on the Consumer Price Index, fell to 2.28 per cent in March 2021 amidst the depreciation in Kyat value and high fuel price, according to the inflation report released by the Central Statistical Organization, under the Ministry of Planning and Finance. The Kyat weakened in the local forex market in March. Consequently, the imported oil price also surged, causing the price index in the transportation group to rise, the inflation report showed. The consumer price fell in other commodities, tobacco and beverages and clothing groups. At the same time, the CPI spiked in food, non-food, household goods and maintenance, rent, transportation, recreation and culture. The price index of education, health and telecommunication went stable amid the COVID-19, the report stated.

The annual rate of core inflation, which strips out volatile food and energy prices, was six per cent in March 2021. The yearon- year inflation rate stood at 2.64 per cent in March, the inflation data indicated. During the one-year period from April 2020 to March 2021, the inflation rate stood at 6.61 per cent during the coronavirus outbreak in March 2020 owing to the weak demand of consumers and a sharp drop in fuel price. The coronavirus impacts triggered the decline in the consumer price index. It continued slipping to 5.21 per cent in October 2020, 4.6 per cent in November, 3.87 per cent in December, 3.18 per cent in January 2021, 2.61 per cent in February and 2.28 per cent in March, respectively.

In March 2021, Ayeyawady Region recorded the highest inflation rate at 5.99 per cent, followed by Kayin State at 4.37 per cent and Nay Pyi Taw at 4.29 per cent. The rate fluctuated with a maximum rate of 5.57 per cent in the Bago Region and a minimum deflation rate of -0.59 per cent in the Mandalay Region. Earlier, the inflation rate was calculated based on a 2006 survey. The base year was later changed to 2012. The Central Statistical Organization conducted a Household Income and Expenditure Survey in 82 townships in November 2012. The authorities concerned have been making efforts on the basis of policies on finance, currency, trade, and foreign currency control in order to reduce the inflation rate, in keeping with the second five-year National Development plan (2016-2017FY-2020-2021FY).

Source: The Global New Light of Myanmar

The US dollar exchange rate fell by K10, following the Central Bank of Myanmar (CBM) selling 3 million US dollars, according to the local foreign exchange market. The US dollar exchange rate dropped when the CBM started to sell 3 million dollars at an auction rate for the first time on 7 June. The dollar exchange rate against Myanmar Kyat stood at K1,590 per dollar on 7 June. The rate directly fell to K1,577 per dollar on 11 June.

On 12 May, the dollar exchange rate hit a high of K 1730 per dollar in the local foreign exchange market. Consequently, the CBM has been selling dollars at an auction rate since 12 May, resulting in the exchange rate falling to K 1,580 per dollar this month. CBM is selling the US dollar at an auction rate, intending to keep the exchange rate stable. In the domestic market in 2021, the highest and 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 and K1,585-1,730 in May.

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. Last year, the rates are pegged at K1,508-1,517 in July, K1,510-1,526 in August, K1,527- 1,565 in September, K1,528-1,537 in October, K1,510-1,524 in November and K1,485-1,513 in December. On 20 September 2018, the dollar exchange rate hit an all-time high of K1,650 in the local currency market.

Source: The Global New Light of Myanmar

The price of paddy remains high, hitting around K650,000 per 100 baskets (one basket is equivalent to 46 pounds), said U Than Oo, the secretary of Bayintnaung Rice Wholesale Centre.cCurrently, the paddy is no longer in the hands of the farmers, and it is stockpiled in the warehouses. The paddy traders are calling for a high price to sell the paddy. Consequently, the price of paddy remains high, he added. The price of paddy has mounted mostly in the regional market. Earlier, the paddy was sold directly from the farmland.

Now, the paddy is being sent to the warehouse to stockpile. So, the warehouse owners will sell the stored paddy at their calling prices. Besides, the price of milled paddy to export abroad has risen, but the price of rice has not gone up. Thus, the millers who will buy paddy to mill will not be convenient. There are only a few companies that buy rice to export. The rice trading has also dropped because the rice traders are not buying the rice with cash down payment. The traders could not make trading with cash down payment because the bank could not fully operate in money withdrawal-like previously.

Currently, the price of milled paddy exported abroad hits around K600,000 per 100 baskets while the price of rice for domestic consumption moves in the range of K650,000-700,000 per 100 baskets, Bayintnaung Rice Wholesale Centre reported. On 23 July, the Committee for Farmers Rights, Protection and Interests Promotion fixed the basic price of paddy at K 520,000 per 100 baskets if the paddy meets the prescribed criteria—14-per-cent moisture content and a fixed percentage of impurities such as sand, weed, and small stones. In accordance with the Farmers Rights, Protection and Interests Promotion Law, the committee has fixed the basic price of paddy for the local farmers to be able to sell at a fair price and search the market for their produce. 

Source: The Global New Light of Myanmar

The average inflation rate for February 2021 was 2.61 percent which has been falling steadily since March 2020, according to the consumer price inflation and inflation rate released by the Central Statistical Organization. The average inflation rate rose for 18 consecutive months from April 2018 to September 2019. It was slightly lower in October and November 2019 and it rose again in December of 2019, January and February of 2020. But it fell again in March, April, May, June, July, August, September, October, November and December and January and February of 2021.

If we look at the national annual inflation rate for the one-year period from February 2020 to February 2021, based on the 2012 , the inflation rate was 8.36 percent in February 2020, and in March 2020, when COVID-19 began in Myanmar 2020, it caused household consumption fell and a decline in fuel prices with an inflation rate of 1.51 percent in February 2021. For the country as a whole, the average inflation rate, based on the 2012 base year consumer prices, averaged 2.61 percent year-on-year in February 2021, down 0.57 percent from 3.18 percent year-on-year in January 202.

From 9.20 percent in February 2020, since March 20, the impact of COVID-19 has been declining in Myanmar, and consumer inflation has slowed and the average inflation rate has risen to 2.61 percent until February 2021. Region Consumer prices and average inflation in the three states and cities were the highest in Ayeyarwady Region at 6.49 percent. In the Union Territory, it is the second highest with 4.67%. Kayin State is the third highest with 4.48%. Annual inflation was highest in Ayeyarwady Region at 4.39 percent and in Mandalay at -19.29 percent, according to the report.

Source: Daily Eleven

The rice prices in domestic markets have increased by K2,000 per bag, said U Than Oo, secretary of Bayintnaung Rice Wholesale Centre. At present, rice worth K32,000-35,000 per bag is highly demanded in the market. The prices of high-quality rice move in the range of K27,000-35,000 per bag. The figures show an increase of K2,000 per bag.

It is expected that the rice fetches at a lower rate before Thingyan Festival (Myanmar New Year Festival in April). Shortly after that, the price usually goes up. During the early monsoon, the rice stocks are commonly found in the hands of millers instead of farmers. Consequently, the price hike occurs amid low supply. The rice prices usually hit a peak in Thadingyut and Tazaungdaing festivals (Oct-Nov). When the newly harvested rice enters the market, the price declines.

The price is unlikely to fall this month, Bayintnaung Rice Wholesale Centre reported. The price possibly remains high for now. The farmers also set the rice crops higher. The demand in the retail market is not that good. The export is not strong as well. As a result, the sharp price hike is not expected amid the low demand. About 80,000 rice and broken rice bags were earlier traded per day at the Bayintnaung Rice Wholesale Centre. In contrast, the trade volume plummeted to about 30,000 bags at present.

Source: The Global New Light of Myanmar

The Central Bank of Myanmar (CBM) sold US$3 million on 7 June for the first time this month at an auction market rate of K1,590. The CBM reportedly sold $24 million at an auction rate in May. The CBM’s move aims at governing the market volatility, the CBM stated. The bullish hard currency gained in the local forex market, reaching the peak of K1,730 on 12 May from K1,330 in January-end. In a bid to control the sharp daily gains of the US dollar, the CBM reportedly sold about 6.8 million dollars on 3 February 2021, 6 million dollars each on 22 and 27 April and $24 million in May in the auction market.

Consequently, the exchange rate dips to K1,590 at present. The CBM trades the foreign currency with the authorized private banks under the rules and regulations of the FX auction market. 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. Last month, the rate fluctuated between K1,585 and K1,730.

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. In 2019, the rates are pegged at K1,508-1,517 in July, K1,510-1,526 in August, K1,527-1,565 in September, K1,528-1,537 in October, K1,510-1,524 in November and K1,485-1,513 in December. On 20 September 2018, the dollar exchange rate hit an all-time high of K1,650 in the local currency market. 

Source: The Global New Light of Myanmar