Aug 15, 2011

Myanmar cuts export tax to help offset currency strength

Myanmar cut export taxes on certain goods for the second time in as many months to help exporters who have been hurt by the appreciation in the local currency, the kyat .

Total taxes on export revenue have been cut to 2 percent from 7 percent for six months from Monday, Aug. 15, a senior Commerce Ministry told Reuters, declining to be identified.

Taxes were cut from 10 percent at the end of June.

The kyat has risen around 20 percent against the dollar over the past year.

Despite Western sanctions, investment money has flooded into the country because of its abundant mineral resources and the repatriation of funds by wealthy Burmese buying up state assets last year in a pre-election sell-off.

The seven export items covered by the temporary measure are rice, beans and pulses, sesame, rubber, corn, marine products, and animals and animal products.

Businessmen said the measure did not go far enough.

"It's a pity the latest measure does not cover some other important export items like garments and wood products," said Myint Soe, a vice-chairman of the Myanmar Federation of Chambers of Commerce and Industry (MFCCI).

Hotel and tourist sector officials said they were also suffering from the strong kyat.

Source: Reuters