NAYPYITAW — Leading businesspeople urged State Counselor Daw Aung San Suu Kyi to reduce tax and bank loan interest rates during a meeting in the administrative capital Naypyitaw on Tuesday.
Potential investors are maintaining a wait-and-see attitude and Myanmar’s economy is experiencing a slowdown, said leading builder U Maung Weik.
Reducing bank loan interest and tax rates will attract investors, he said.
“As the interest rate on bank loans is 13 percent, businesses find it hard to profit. There is a need to reduce this rate temporarily to 8 or 9 percent. We believe many investors will come back into the market then,” said U Maung Weik.
“An investor has to buy equipment to start a business and then pay a 30 percent tax. They have not even started the business but have paid a 30 percent tax already. So, we’d like that the tax rate be reduced to 5 percent for one to two years,” he added.
Daw Aung San Suu Kyi replied that she would consider the request. However, she said that economists had suggested that too many tax exemptions are not good for the economic growth of a country.
“The government has to listen to various sides and strike a balance. We can’t just look at the economy. We can’t just look at the needs of our country. We have to look at global trends,” she said.
“We’ll seriously consider these two points. But I can’t make a decision right now,” she added.
The state counselor said that tax is levied for government expenditures and asked the businesspeople to cooperate, saying that she does not want to sell the country’s natural resources to tackle the deficit.
The tax rate should be realistic, said U Shein Win, chairman of the Federation of Myanmar Construction Entrepreneurs Association, who also called for a tax reduction.
“The government should record its tax revenues for 2018. If its tax earnings next year are less than this year after reducing the tax rate, we will fund the deficit. Even if other members of the federation don’t pay, I will give the needed funds by selling my property,” he said.
The state counselor said that the government would set a fair rate for both sides. “No country sets fixed tax rates. Tax rates have to be adjusted as necessary,” said Daw Aung San Suu Kyi.
Adviser to Kanbawza Bank U Than Lwin also supported reducing tax and interest rates.
“Rather than thinking that tax reduction will lead to a decline in tax revenues, the government should think about the economic benefits. Tax reduction will facilitate economic recovery and generate more tax revenue in the long run,” he said.
“I don’t mean the tax rate should be kept low for all time, but just a tax incentive to attract investors,” he added.
He also compared the bank loan interest rates in Myanmar and Thailand. “The interest rate is just 1.5 percent in Thailand. Interest is cost and the competitiveness is low if costs are high,” he said.
President of the Union of Myanmar Federation of Chambers of Commerce and Industry U Zaw Min Win also urged the government to adopt necessary policies to attract foreign investment and to boost exports in order to stabilize the kyat-dollar exchange rate.
Translated from Burmese by Thet Ko Ko.
