7 May 2019
MYANMAR: 2% Export Withholding Tax Reinstated as of 1 May
The 2% withholding tax on export income was reinstated for all business as of 1 May. The reintroduction of the tax, which was abolished in January 2018 for all registered large and medium-sized companies, follows growing concerns that individual traders, who were otherwise not eligible for the exemption, have been misusing the provision by exporting goods under the guise of a genuinely-eligible companies, whether with or without their knowledge or co-operation.
In addition, the country’s Internal Revenue Department (IRD) has stated that the levy has also been reintroduced as means of providing a level playing field for all exporters as the previous exemption favoured the larger players. A number of exporters, however, have called for the measure to be withdrawn, while maintaining it has imposed an untenable strain on their working capital and profit margins. In line with this, the IRD has indicated that the tax may be withdrawn once it satisfied there will be no further irregularities. Earlier, in April 2018, the country had abolished all other withholding tax arrangements.
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