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Myanmar: Gemstones and jewelry omitted from Union Tax Bill 2019

Gemstones and jewelry have been omitted from the special commodities list in the 2019 Union Tax Bill submitted to the Pyidaungsu Hluttaw on August 7.

“Previously, gemstones and jewelry were levied a tax of 15 percent under the special commodities list but since they now come under the Myanmar Gemstones Law, they’re excluded from the list,” said Ministry of Planning and Finance deputy minister U Maung Maung Win.

The Myanmar Gemstones Law came into operation this year and covers taxation for gemstones and jewelry. The law was passed by the Pyidaungsu Hluttaw in late December last year and was enacted from late January this year.

In the 2018 tax bill, raw jade allocated for exports were taxed at 15pc while rubies, sapphires and other raw gemstones were taxed at 10pc. Jewelry made from jade, rubies, sapphires and other gemstones were taxed at 5pc.

Myanmar Gems and Jewelry Entrepreneurs Association vice chair U Zaw Bo Khant said the nature of the gemstones and jewelry business made the special commodities tax unsuitable when compared to consumer items such as beer and cigarettes.

“Beer, cigarettes and other items can be taxed depending on their rate of production but it is not appropriate for gemstones and jewelry,” he said.

U Zaw Bo Khant noted that sales at emporiums have been decreasing in recent years and the high costs and taxation did not help. “The high tax rate means a lot of the gemstones are smuggled out to China,” he said.

U Zaw Bo Khant said tax from sales from the emporiums have decreased with US$300 million in tax generated in fiscal 2013-14, US$200 million in 2014-15 and US$190 million in 2016-17.

Data from the Natural Resource Governance Institute(NRGI) showed that Myanmar registered selling an average of US$1.2 billion a year worth of jade between 2012 and 2016 at emporiums the government organized but China, which buys most of the jade, reported importing US$2.6 billion over the same period, according to The Diplomat.

NRGI data also showed that in fiscal year 2015-16, Myanmar’s jade production alone was between US$3.7 billion and US$43.1 billion. – Translated

Source: https://www.mmtimes.com/news/gemstones-and-jewelry-omitted-union-tax-bill-2019.html