Myanmar’s govt officials to be given vehicle import licences

YANGON, Jan 5, 2020, Myanmar Times. The commerce ministry is set to grant individual licences to senior government employees to import vehicles without going through official car dealerships, according to a ministry memo seen by this newspaper, Myanmar Times reported.

A notice from the Ministry of Commerce said senior government officials will be allowed to import cars – with models selected by the ministry – by receiving permits. The memo does not make it clear whether the vehicles are intended for official or private use.

The various echelons of officials eligible for the scheme, according to the document, are director generals and “senior government officials”, including deputy director generals and “government employees with 25 years of work experience and those who received ‘Good Civil Service Award’.” Director generals and senior officials must apply for permits by January 8.

The notice, signed by permanent secretary U Aung Soe on January 2, did not mention the tax arrangements for cars imported under this scheme and did not say whether the cars are restricted to official use. Multiple industry sources say it is unclear whether the imports will be tax exempted and why it is necessary to bypass the official dealerships. If the government wants to allow tax exemption, officials could in theory still purchase vehicles through the dealers and then reclaim the tax and duty paid.

According to a public Facebook post by U Soe Tun, head of the Myanmar Automobile Manufacturers and Distributors Association, custom duty and taxes levied by the Road Transportation Administration Department on these vehicles will be exempted.

Whether and how regulators will prevent the individual permits from being traded on the market is also not clear.

“The commerce ministry has made significant changes allowing new cars to be sold more easily in Myanmar through official distributors and consequently a more attractive place for investors. These new import permits should be in line with this strategy,” commented a senior automotive executive in Yangon.

Automotive businesses want the authorities to clarify the details of the import permits, as well as tax arrangements and duties levied, so they can effectively support this initiative, he told this newspaper.

Car ownership in Myanmar – with 20 vehicles per 1000 people – is relatively small, according to data provider CEIC. Overall the market demand for new vehicles is expected to grow and is supported by the emergence of competitively-priced auto insurance and vehicle loans.

But authorised importers and distributors are not allowed to register imported vehicles in Yangon, the commercial capital, after the government suspended Yangon’s parking recommendation system in April 2016. No new system has been implemented so far.

The awarding of individual import licences appears to go against the direction of reforms pushed by the government in recent years, with a decline in individual import permits as the authorities seek to modernise the market.

The Myanmar Times has contacted the commerce ministry for comment.

Tags: Myanmar