Construction industry hoping for less taxes

The construction industry is hoping for lower taxes for the industry, which had been lobbied for last year but was not approved when the Union Tax Bill 2019 was submitted to Pyidaungsu Hluttaw on August 7. Section 25 of the bill includes the tax reduction asked for by the industry.

Construction executives pointed out that the decision not to reduce taxes had put more pressure on an industry already suffering from a multi-year slowdown in the property market that started from 2014.

Yangon-based MKT Construction Co Ltd managing director U Myo Myint urged the legislators to consider the tax relief. “Economic conditions are very slow, the tax rates are high and deals are not being made, I hope they’ll support the request for the relief,” he said.

Myanmar Construction Entrepreneurs Federation central executive committee member U Kyaw Kyaw Soe said the property market needs relief in order for businesses to step-up with more projects.

The taxes proposed were 3 percent for purchases of properties valued between K1 to K100 million, 5pc for those valued from K100 million to K300 million, 10pc for properties valued fromK300 million to K3 billion and 30pc for properties valued above K3 billion.

This year’s bill differs from last year’s as the tax rates have been proposed based on purchase value.

In last year’s Section 25, taxes were reduced to 3pc in the first six months and 5pc in the subsequent six months, from 30pc.

U Myo Myint said this time around, the proposed rates ensure that those buying properties to live in will have lower tax rates.

Daw Moh Moh Aung, general secretary of Myanmar Real Estate Service Association said taxes should be more favourable toward first-time buyers looking for homes to live in. “Taxes should be reduced for first time home owners on top of providing options for longer term instalment payments,” she said.

Construction executives believe that lowering taxes for two to three years will help to stimulate the property market while still bringing in tax revenue to the government. At the same time, it will also help the economy.

U Myo Myint said that a reduced tax rate for the industry will mean more investments can be made and free up capital for investing and business expansion.

Source: Myanmar Times

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