No automatic tax breaks under new law

Companies investing through the Myanmar Investment Commission will no longer automatically receive a five-year tax break, but will be granted exemptions based on the nature of the project and its geographic location, MIC secretary U Aung Naing Oo said yesterday.

The changes will come into effect when the new Myanmar Investment Law is passed, he said. The law will consolidate the existing Foreign Investment Law and the Myanmar Citizen’s Investment Law and, in theory, will create a level playing field for local and foreign investors.

Under both existing laws, investments approved by the commission are tax-exempt for five years, but this clause has been removed in the new law, U Aung Naing Oo said at a press conference in Yangon.

“The provision was aimed at encouraging more foreign investment, but we need to consider whether it is suitable for some investments, so we plan to amend it,” he said.

Investors will be granted different levels of exemption depending on the type of investment and its location, he said. Businesses relating to alcohol and cigarettes will no longer be tax-exempt.

“If a business is really good for the country, it will not have to pay taxes for seven years or more. This amendment means companies are not automatically granted tax breaks just because they invest through the commission,” he said.

Businesses will be ranked from 1 to 3 according to the role they can play in developing the economy. Businesses in priority sectors, ranked 1, will be most likely to get tax breaks.

A draft of the Myanmar Investment Law has been submitted to the president and the Union government for review, he said. It is also available on the Directorate of Investment and Company Administration website.

 

Source: Myanmar Times

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