Myanmar cuts tariff on import of private cars, SKD vehicles amid COVID-19 impacts

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In a bid to remedy the businesses slowdown caused by the COVID-19 impacts, the government has brought tax cuts on the importation of private cars with non-commercial purpose and semi-knocked down vehicles assembled in Myanmar starting from 1 August, according to notification of the Ministry of Planning, Finance and Industry released on 29 July. This move is likely to bring down the prices of vehicles with engines above 1,500 CC, said a car dealer. The government lowered tax rates from 30 to 20 per cent on imported private cars with the engine under 2,000 CC and 40 to 30 per cent on cars with 2,001 CC and above. Meanwhile, the locally assembled cars under the SKD system were exempted from 10 per cent tax. Additionally, tariffs on SKD vehicles with 2001 CC and above were reduced from 20 to 5 per cent.
However, tax cuts still do not cover special goods tax, commercial tax, and income tax and registration fees at the Road Transport Administration Department (RTAD) to hold the vehicle ownership status. “We are encouraging vehicle owners to update the ownership status as the tax rate drops significantly to 3 per cent from 15 per cent. However, the rate will be applied only for the current financial year (1 October 2019-30 September 2020), said an official of RTAD.
Production of brand-new cars in Myanmar showed a decrease of 22.3 per cent in the first five months from January to May in 2020, as per statistics released by the ASEAN Automotive Federation. The production of cars in January-May plunged to 4,764 units from 6,128 units registered in the year-ago period. Meanwhile, the sales of brand-new cars slightly rose 4 per cent during the period compared against 2019. A total of 7,552 cars were sold between January and May as against 7,215 cars in the previous year, according to the statistics released by ASEAN Automotive Federation.
Purchase of brand-new cars on instalment plans is popular among people. Before the coronavirus outbreak, the new auto market was booming and some buyers have shown interest in purchasing vehicles assembled under the semi-knocked down (SKD) system. About 18 companies have been permitted to assemble cars using the SKD system at local plants. — Ko Khant (Translated by Ei Myat Mon)

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