Myanmar garment manufacturers request tax exemption in FOB system

Myanmar garment entrepreneurs have requested the Ministry of Commerce and the Ministry of Planning and Finance to grant a tax exemption in the Free-on-Board (FOB) system to maintain Myanmar’s garment industry for the long term, it is learnt from the Myanmar Garment Entrepreneurs Association.

Myanmar garment factories are currently operating under Cut,Make and Pack (CMP) system. Six to 15 per cent of taxes are levied on the export of garments processed under FOB system if the clothing is exported under its own brand.
To enhance the garment sector, manufacturers are being asked to switch from the CMP system to FOB.

The garment enterprises have not improved because of the requirements in procedures. Additionally, the citizen-owned garment factories are dealing with the problem that their factories could be shut down over the next five years.

Myanmar’s garment market is strongly influenced by Japan, Europe, South Korea, America and China under the CMP system. The garment industry earned US$1.65billion in 2015 and the income from garment factories are expected to reach US$2.1billion by the end of 2016.

There are a total of 900 locally operated garment factories with a labour force of about 350,000.

Source: Global New Light of Myanmar

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