Burma

Lawmaker Questions Letpadaung Revenues

By Htet Naing Zaw 15 February 2017

A Magwe Division lawmaker questioned the Ministry of Resources and Environmental Conservation’s tax profits on the controversial China-backed Letpadaung copper mining project during the Lower House session on Tuesday.

Myaing Township Lawmaker U Aung Khin Win quizzed the Union minister for resources and conservation U Ohn Win on the taxation of the mine in Monywa District’s Salingyi Township under the previous government, and how the new government has handled the mine since April 2016.

U Ohn Win announced that the Burmese government obtained US$20 million from royalties, production sharing, commercial taxes, and income taxes, for the period of eight months between May 5, 2016—when industrial production began—and Jan. 31, 2017.

The lawmaker complained that taxation should have started in March 2013 as the project—a joint venture between China’s Wanbao Mining Co, military-controlled Myanmar Economic Holdings Limited and the Burma government—was approved by the Myanmar Investment Commission back in March 2010 and given three years to set up before product was taxable by the government.

Amid strong opposition from locals, however, there were delays and the tax-free period was extended two times, for a total of 36 months, until May 2016, the minister explained.

“The set [tax-free] project duration previously allowed was three years, but there were delays as [the government] had to negotiate with local villagers,” the minister explained. “So, the duration was extended two times, 18 months each time.”

When quizzed on what laws or rules and regulations permitted the extension, the minister said he would answer later by letter.

U Khin Aung Win told reporters he was upset that tax was only levied in May 2016 and that he had seen trucks of copper leave the mine prior to September 2015.

“Extraction has been going on a long time,” he said.

The Burma government will be receiving the $20 million as copper in payment in-kind. The minister said the ministry will invite tender to sell over 2,600 tons of copper.

There have been ongoing tensions between the mine’s operators and local residents.

On Nov. 29, 2012, over 70 monks and around 10 persons peacefully protesting the mine were injured when security forces used white phosphorus munitions against them. In 2014 a female protestor was shot dead by police.

U Thein Sein’s government formed an investigation commission led by Daw Aung San Suu Kyi. The commission launched an inquiry and the agreement was amended and signed in July 2013.

According to the amended agreement, the Burma government gets a 51 percent ratio of shares from royalty tax, commercial tax, and income tax.

Wanbao’s share is 30 percent and Myanmar Economic Holdings Company Limited is 19 percent.

A committee to implement the recommendations by Daw Aung San Suu Kyi’s commission was subsequently formed. But the recommendations have yet to be fully fulfilled, complained Lower House lawmaker Daw Khin San Hlaing, who is a member of the commission.

Translated from Burmese by Thet Ko Ko

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