European Firms, Local Dealers Slam Govt’s Tax-Free Car Import Scheme
By Zaw Zaw Htwe 29 January 2020
YANGON—The European Chamber of Commerce in Myanmar (EUROCHAM Myanmar) and the Automotive Association of Myanmar (AAM) have raised objections to the Myanmar government’s decision to allow civil servants to import vehicles tax-free.
The government will soon issue an estimated 34,000 new car import permits.
EUROCHAM Myanmar and the AAM said at a press conference on Wednesday in Yangon that the government’s plan will damage the automotive industry in Myanmar.
”We are asking the government not to implement this policy of granting free car import permits… In the current situation, car markets have been seriously damaged,” AAM chairman U Aung Win told reporters on Wednesday.
On Jan. 2, the Ministry of Commerce said it would grant tax-exempt permits to deputy directors-general and those with at least 25 years of civil service to import vehicles worth 30 million kyats (US$20,492), while higher-ranking officials can import more expensive cars worth up to 150 million kyats.
The imported vehicles will be exempted from customs duties and road taxes, though they will still be subject to special goods and commercial taxes.
Currently, the customs duty and taxes imposed by the Road Transport Administration Department total 100 percent or 150 percent of a car’s price, depending on its engine power.
Marc de la Fouchardière, executive director of EUROCHAM Myanmar, said at the press conference Wednesday that the implementation of the vehicle import permit system could damage the automotive industry in Myanmar and significantly hurt the image of Myanmar within the foreign investor community.
EUROCHAM Myanmar is an organization that promotes trade, commerce and investment between the EU and Myanmar and represents European businesses in Myanmar.
AAM and EUROCHAM Myanmar say car sales in Myanmar have already been affected by the government’s announcement.
De la Fouchardière said that the policy of granting tax-free vehicle permits will affect the implementation of infrastructure, including electricity, road and urban development projects, as they depend on tax income from the automotive industry.
He also pointed out that the permit system goes against the current policy for developing the automotive industry in Myanmar.
British Chamber of Commerce Myanmar chair Peter Beynon also said that the new policy could lead to huge losses of consumers, foreign investment and job opportunities for the whole automotive industry.
Union Minister of Commerce Dr. Than Myint told the media at a recent press conference that granting permits to import vehicles tax-free is necessary for the economic development of the country.