High Duties Encourage Illegal Thai-Burma Crossings, Traders Say

By Zwe Htet 25 December 2012

Despite efforts to reduce restrictions on cross-border trade, local businesspeople in Thailand and Burma continue using illegal routes to avoid government taxes, a top border trade official says.

Col. Yan Naing Htun, who oversees the second-largest border trade zone as director of the Border Trade Department in Myawaddy, in southeast Burma, says that since earlier this month, local traders have been given license cards to import and export goods, allowing trade worth at least 5 million kyat (US $5,800).

“Imported materials that pass through us fall under the import licenses, with set taxes,” he said.

But in certain areas, “we cannot control trading in other ways,” he added, explaining that some traders continued to avoid taxes by taking illegal routes.

Alcohol and cigarettes are among the major goods imported illegally into Burma, he said, although the country’s Ministry of Commerce is planning to ease restrictions on them.

Petrol, cosmetics and foodstuffs are mostly imported into Burma through the Myawaddy trading zone, while fisheries and farming products are exported there.

The Myawaddy’s Border Trade Department takes in a daily income of at least $ 2 million.

Small-scale traders who cannot afford to cover the import and export duties on their own often seek outside assistance by paying a fee to agents at companies, which have trade licenses and can cover the duties.

“Big-scale traders pay the license duties, but those [smaller-scale traders] without licenses work with companies, since there are many agents,” said Nyi Nyi Aung, a company trading agent.

Agents help the small-scale traders transport their goods across the border, with the transportation cost for a big truck from Myawaddy to Rangoon at about 1 million kyat.

A female trader who imports foodstuffs from Thailand told The Irrawaddy that she believed the duties were too high.

“We have to pay a steep tax,” she said. “It applies to everything, and it should be reduced.”

Drivers must also pay between 500 and 1,000 kyat at checkpoints along the way.

“Many people still use illegal routes due to poor road conditions,” said Win Shwe, a driver on the Myawaddy-Kawkareik road. “There are blockages and car accidents due to undisciplined drivers.

“If roads were repaired, more people would go on the legal trade routes.”

Some traders complain it is difficult to sell their goods at low prices because they must pay such high duties to a mobile team, which was formed by Burma’s Department of Border Trade (DBT) to stem illegal cross-border trade. The mobile team operates on the Myawaddy, Tachilek and Kawthaung routes to check imported goods.

An official from the trade department said the team destroys any goods found to be imported illegally.