Welcome to the August 2023 edition of our newsletter. In this edition:
Legal/regulatory developments
New IRD forms for DTA claims. The Internal Revenue Department has released another raft of new forms, in Notification 108/2023, this time in relation to making claims for tax exemptions under Double Taxation Agreements (DTA).
New commodity price committee formed. The SAC formed a new Union-level steering committee for the stabilization of commodity prices on 27 July under Notification 114/2023. The committee’s main role is to try to stabilize the prices of dry groceries and staple foods, maintain a balance between domestic production and consumption, and try to address high freight rates.
Union government Cabinet reshuffle. The Union Government announced the new Cabinet line-up on 3 August in Order No. 61/2023, and separately announced changes in other senior positions, which include replacements of the Chief Justice of the Union Supreme Court, Union Auditor-General and Chairman of the Anti-Corruption Commission.
Licence cancellations if forex not sold at CBM online rates. The CBM has announced that exporters and importers making sales/exchanges of foreign currency must transact at the exchange rates set via the online forex trading system launched by the CBM on 22 June.
IRD calls for commercial tax crackdown and offers rewards for reporting breaches. The IRD released an announcement on 7 August which: reminds owners of certain types of businesses that they are obliged to pay commercial tax (CT) and apply CT stickers to payment receipts; and states that if a person reports a failure of a business to apply CT stickers that person will be eligible for a reward.
CBM allows more use of THB for international payments. On 14 August, the Central Bank of Myanmar released Instruction No. 11/2023 which provides that authorised dealer banks (i.e. banks with foreign exchange licenses) are permitted to use Thai Baht to carry out international payments.
Bangladeshi State-owned bank freezes Myanmar accounts. Bangladeshi State-owned bank Sonali Bank has reportedly frozen accounts held by Myanma Foreign Trade Bank (MFTB) and Myanmar Investment and Commercial Bank (MICB) following the US implementing economic sanctions against these two Myanmar State-owned banks.
CBM flags potential tightening on USD physical cash holdings. The Global New Light of Myanmar has reported that the Central Bank of Myanmar issued a public notice on 20 August stating that action will be taken under the Foreign Exchange Management Law against persons who hold foreign currencies without permissions or licence.
Investment news
UK department store bans Myanmar gems. Burma Campaign UK (BCUK) has been crowing about having pressured UK department store chain John Lewis Partnership, to stop selling gem products sourced from Myanmar.
Wa State mining ban kicks in. The International Tin Association (ITA) announced on 3 August that it has confirmed that the WSAD’s mining ban did in fact commence on 1 August (which was a public holiday in Myanmar) and mines in Wa State closed on that day.
Myanmar foreign trade volumes continue to tick downwards. The Ministry of Commerce recently announced high level foreign trade figures for the four month period from April to July 2023. Total trade volumes were US$11 billion for the period, but were down US$35 million compared with the same period last year.
India Railways has ambitions of linking to Myanmar rail network. The Ministry of Railways in India recently granted approval for the undertaking a final location survey for a railway line route between Sairang (near Aizawl) and Hbichhuah in Mizoram State, the latter of which is situated near the Myanmar border. A final location survey is apparently also underway for a route between Imphal and Moreh in Manipur State – with Moreh being the border town on the Indian side of the Tamu border crossing in Sagaing Region.
Australian government body unfairly criticizes Mallee Resources for its Bawdwin JV exit. The Australian National Contact Point for Responsible Business Conduct has just released its final report in response to a complaint filed regarding Mallee Resources’ participation in a joint venture with Myanmar companies Win Myint Mo Industries (WMM) and EAP Global Mining (EAP) for the re-development and re-commencement of the historic Bawdwin mining project in northern Shan State.
UOB further cuts off Myanmar. UOB has sent a confidential communication to Myanmar banks that it deals with informing them that from 1 September it will: Restrict all incoming and outgoing payments to and from Myanmar accounts; Introduce tough new curbs on Visa card and Mastercard transactions for Myanmar individuals and banks; close Myanmar banks’ “nostro” accounts at its Hong Kong branch.
Pathein joins the list of airports slated for international upgrade. Prime Minister Senior General Min Aung Hlaing has announced that Pathein airport will be upgraded to an international standard, along with upgrading the Pathein-Yangon expressway.
CBM calls for online gold trading. The Governor of the Central Bank of Myanmar has called for the establishment of an online gold trading mechanism to ensure gold price stability at a recent meeting with the Monitoring and Steering Committee on Gold and Currency Market.
Government-owned factories re-opening. At the official re-opening of the Newsprint Factory (Thaboung), Prime Minister Senior General Min Aung Hlaing stated that the government is actively working towards bringing various closed factories bank into operation in order to promote domestic manufacturing.
MRF expects rice export boost. With dry conditions around the region affecting rice production, and India implementing rice export restrictions to support domestic supply, rice prices are surging and the Myanmar Rice Federation is expecting a major increase in Myanmar’s rice exports over the balance of this year.
H&M to cease sourcing from Myanmar. Global fashion retail giant H&M has decided to gradually stop sourcing from Myanmar, citing increasing reports of labour abuses in garment factories in Myanmar.
Bangladeshi State-owned bank freezes Myanmar accounts. Bangladeshi State-owned bank Sonali Bank has reportedly frozen accounts held by Myanma Foreign Trade Bank and Myanmar Investment and Commercial Bank following the US implementing economic sanctions against these two Myanmar State-owned banks.
Shweli-3 hydropower tender. On 17 August, the Department of Hydropower Implementation under the Ministry of Electric Power published an advertisement (Myanmar language only) for the tendering of completion of the stalled Shweli-3 hydropower project in Shan State under an IPP/BOT structure.
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