MYANMAR Central Bank of Myanmar Updates Extension of Reduction Period of Minimum Cash Reserve Ratio at Banks
Under Notification No. 3/2022, the Central Bank of Myanmar ("CBM") has extended the temporary reduction period of the minimum cash reserve ratio at banks to 3% of the total deposits of customers from 30 March 2022 to 31 March 2023. Notification No. 3/2022 repeals CBM Notification No. 19/2021. Click here to access Notification No. 3/2022 (in Burmese).
CBM Eases Cash Withdrawal Restrictions for Certain Businesses
On 1 April 2022, CBM issued an order instructing banks to allow cash withdrawals for factories in industrial zones, businesses and development projects operating under the government budget, as well as for health and religious purposes. As CBM strives to improve the management of cash flows nationally, the banks have been allowed to ease cash withdrawal restrictions subject to specific conditions.
- Factories in industrial zones are allowed unlimited cash withdrawals for employee salaries, as well as a maximum withdrawal of MMK100 million per week for the purchase of raw materials.
- Government departments are allowed a maximum cash withdrawal of MMK100 million per week for training expenses and cash rewards.
- A cash withdrawal of MMK100 million per week is allowed for government projects and logistic expenses of government departments in relation to the regional and rural development projects under government budget.
- Private individuals are allowed a maximum cash withdrawal of MMK10 million per week, subject to the presentation and submission of the required documents to CBM.
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Enactment of Union Taxation Law 2022 On 30 March 2022, the SAC enacted the Union Taxation Law 2022 ("UTL") for the forthcoming financial year 2022-2023. The UTL introduces a one-time commercial tax of MMK20,000 for selling and activating a new SIM card and a 15% commercial tax on the income earned from internet connection services. The UTL also puts in place revised personal income tax rate ranges for undisclosed sources of income that are still subject to income tax as shown in the table below.
|
Under Union Taxation Law 2021 |
Under Union Taxation Law 2022 |
|
Income (MMK) |
Income Tax Rate |
Income (MMK) |
Income Tax Rate |
|
From |
To |
From |
To |
|
1 |
100,000,000 |
3% |
1 |
300,000,000 |
3% |
|
100,000,001 |
300,000,000 |
5% |
300,000,001 |
600,000,000 |
5% |
|
300,000,001 |
1,000,000,000 |
10% |
600,000,001 |
1,000,000,000 |
10% |
|
1,000,000,001 |
3,000,000,000 |
15% |
1,000,000,001 |
3,000,000,000 |
15% |
|
3,000,000,001 and above |
30% |
3,000,000,001 and above |
30% |
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Enactment of Myanmar Police Act On 25 March 2022, the Ministry of Home Affairs enacted the Myanmar Police Act. One of the main objective of the law is to safeguard national security and protection. Some of the provisions of the law extend the involvement of police forces in the state's defence and security affairs for a certain period when necessary. Section 6 also allows the State Administration Council ("SAC") to reform the duties and structure of the police forces as may be necessary. The Myanmar Police Act abolishes the four previous police laws i.e., Rangoon Police Act, 1899, the Police Act 1945, the Karen State Police Act 1959, and the Kayah State Police Act 1959.
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Ministry of Commerce: Additions to List of Goods Requiring Import/Export Licences The Ministry of Commerce ("MOC") has issued three newsletters that add items to the list of goods that need import and export licences for their importation and exportation, as the case may be. This is a follow up step by MOC in an attempt to exercise foreign exchange control, and ensure national and food security as well as environmental conservation.
- MOC Newsletter No. 1/2022: Goods requiring import licences include 451 (based on a 6-digit HS Code) or 826 (based on a 10-digit HS Code) categories / sub-categories of goods in relation to foodstuffs, plastic-based finished products and household products, wood pulp, silk, cotton, carpet and other flooring, cotton fabric, glass products, and bicycle and automobile accessories. The newsletter was issued on 25 January 2022 and came into effect on 1 March 2022. (Note: The Newsletter is in Burmese.)
- MOC Newsletter No. 2/2022: Goods requiring import licences include 57 (based on a 6-digit HS Code) or 141 (based on a 10-digit HS Code) categories / sub-categories of commodities in relation to plastic raw materials. The newsletter was issued on 1 March 2022 and came into effect on March 2022. (Note: The Newsletter is in Burmese.)
- MOC Newsletter No. 3/2022: Goods requiring export licences include 11 (based on a 6-digit HS Code) or 12 (based on a 10-digit HS Code) commodity lines including corn, cereal flour, maize, corn flour and 12 other goods. The newsletter was issued on 9 March 2022 and came into effect on 1 April 2022. (Note: The Newsletter is in Burmese.)
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Intellectual Property Department – Refiling of Registered Trademarks During the training sessions held from 25 February 2022 to 1 March 2022, the Intellectual Property Department ("IPD") of the Ministry of Commerce shared updated information on topics such as trademark applications and representation forms, as well as technical knowledge in relation to online filing and payment systems.
IDP also stated that the second phase of the soft opening for the re-filing of registered trademarks, together with the official rates for re-filing trademarks through e-payment, will be announced in due course, possibly within the current year.
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Draft Cybersecurity Law On 13 January 2022, the Ministry of Transport and Communications ("MOTC") circulated the Draft Cybersecurity Law ("Draft CS Law") to a number of Ministries. The Draft CS Law seeks to enhance privacy and data protection as well as introduce measures for cyber security against cyber-attacks and terrorism.
The Draft CS Law has similarities to the previous draft circulated to mobile network operators and licensed telecoms service providers for feedback on 9 February 2021 ("9 February 2021 draft"). However, the key differences between the Draft CS Law and the 9 February 2021 draft include:
- Additional clarity regarding the concept of "digital service providers" (with the key implication being that providers of digital platform services, such as Facebook, TikTok, etc., would need to register with the authorities in Myanmar before they can carry out their businesses); and
- the requirement to obtain MOTC's prior approval for the use of a virtual private network (VPN).
It is viewed that these provisions are aimed to quash dissent and curb the free flow of information in Myanmar, including freedom of speech.
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Myanmar's State Administrative Council Seeks Revenue through Digital Lottery Before the end of April 2022, the military regime plans to initiate an online lottery system in partnership with private companies, with several local and foreign firms. The firms are still in talks on whether to allow the participants to use bank accounts and other authorised payment channels. This initiative aims to mitigate the slump in tax collections from the traditional (i.e. physical) lottery system.
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Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only
intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice.
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