Local garment factories are attempting to export their own branded garments, according to the Myanmar Garment Entrepreneurs Association. Currently, local garment factories export their products with the Cut-Make-Pack (CMP) system.
“We are unable to export our products with the Free-On-Board (FOB) system. Currently, we are trying to get tax exemption for the FOB system.
“We are discussing this with the US to get some tax relief on the products exported with the CMP system because the garment industry was not included in the reinstatement of the Generalized Scheme of Preferences (GSP)”, said U Myint Soe, the chairman of the Myanmar Garment Entrepreneurs Association.
In the US, cotton wear is taxed 10 to 12 per cent and nylon wear is taxed 37 per cent. The government collects 6 to 15 per cent tax on FOB system products. Therefore, the association has submitted a proposal of tax exemption for products exported with FOB system to the Ministry of Commerce and the Ministry of Planning and Finance.
The garment industry earns around 10 per cent of a garment’s value. Currently, 33 per cent of local garment production is exported to Japan, 25 per cent to South Korea, 2.4 per cent to the US and 2.4 per cent to China.
Source: Global New light of Myanmar
