YANGON—Despite the Myanmar government’s efforts to ease the economic impact of COVID-19, the country’s economy has remained in a significant slowdown. This week, the Myanmar Trade Promotion Organization (Myantrade) said in its latest report that 76 percent of export companies have been effected by COVID-19 and nearly half of them are expected to face a significant decline in orders from aboard in coming months.
The Myanmar Investment Commission (MIC) also said that around 10 enterprises notified the commission last week that they are closing or have already closed due to the effects of COVID-19. Additionally, trade data shows that Myanmar’s exports to China in the first 10 months of this fiscal year dropped by more than US$200 million compared to the same period from last year. Furthermore, the government also urged companies to pay taxes online to curb the further spread of COVID-19.
Myanmar’s export companies hit by COVID-19
A Myantrade survey on the impacts of COVID-19 on exports found that 76 percent of export companies have been hit by the pandemic and more than half of the companies in the survey are facing a decline in orders of 50 percent or more.
Myantrade surveyed 226 export companies in the country. The Myantrade team is responsible for trade promotion and falls under the Ministry of Commerce.
Of the 76 percent of export companies affected by COVID-19, 30 percent were severely affected and the remaining 46 percent were moderately affected, the report said.
The survey found that 19 percent of companies are experiencing a decline in orders by up to 20 percent, while 36 percent of respondents said they have not received any orders from their buyers for the next three months.
According to the survey, more than 50 percent of companies saw a drop in orders, with 18 percent seeing their buyers cancel orders. More than half of export companies are expecting a further drop in orders in the next three months, the survey said.
Companies to close down due to COVID-19
MIC received another round of notifications of business closure last week as companies struggle with the effects of COVID-19, according to the Directorate of Investment and Company Administration (DICA), the government investment agency. The MIC said that it received around 10 notifications of closure but that the process was still ongoing and an exact number wasn’t available yet.
But DICA did not mention whether the companies that filed for closure are owned by local or foreign investors, and not specify the types of businesses.
MIC said around 100 cut-make-pack (CMP) garment enterprises and 63 other businesses reported closures between Jan. 1 and June 21.
While MIC tracks relatively large enterprises, its data doesn’t include small businesses. The Ministry of Labor, Immigration and Population said in June that more than 140,000 locally-based workers have lost their jobs due to the closure of 5,658 micro, small and medium-sized enterprises and 270 large factories, shops and restaurants.
Myanmar sees significant decline in exports to China
The Ministry of Commerce said Myanmar’s earnings from exports to China dropped by more than US$200 million in the first 10 months of the current fiscal year (2019-2020) compared with the same period in the previous fiscal year (2018-2019).
The ministry said export earnings declined due to the Chinese government’s tightening of border control rules between the two countries to curb the further spread of the pandemic.
Myanmar’s exports to China accounted for over US$3 billion in trade via the Muse, Chinshwehaw, Kanpiketi and Lweje border gates from Oct. 1, 2019 to July 10. Last fiscal year, Myanmar exported US$3.29 billion worth of goods to China, according to the Ministry of Commerce.
Government urges companies to use online tax payment system
The government’s Internal Revenue Department (IRD) said Myanmar companies should use a digital payment system to pay taxes online starting from Oct. 1.
The department announced that it has been developing online payment systems for both companies and individual tax payers to allow tax collection to continue while adhering to social distancing rules, in order to curb the further spread of COVID-19.
The IRD said tax payers can pay taxes using online services from local private banks such as Kanbawza Bank, Ayeyarwady Bank, Co-operative Bank, United Amara Bank and others.
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