Applications for the import of passenger vehicle is down by more than 5,000 so far this fiscal year compared to the same period in the previous fiscal year, said U Aung Htoo, deputy minister for Ministry of Commerce.
The government has been trying to limit the import of cars to control traffic congestion in the country, particularly in Yangon. Among the restrictions imposed last year was allowing imports of only left-hand drive cars.
As a result, only 9,326 import permit applications have been received as at August 18, compared to 15,117 applications received over the same period last year. That’s a drop of 60 percent, or 5,791 permits, worth some US$123.5 million, U Aunt Htoo said in his report submitted to the Pyidaungsu Hluttaw on August 31.
Trade deficit
The other reason for controlling the number of car imports is the widening trade deficit. As such, the import of luxury cars should be restricted, said Daw Khin San Hlaing, Pyithiu Hluttaw representative of Palae Township, Sagaing Region, on August 30.
“The State’s trade deficit is high, which is not good in the long term. Therefore, the import of goods which are not basic requirements for the public should be controlled,” she said.
In 2016-17, the trade deficit was more than US$ 17 billion. Of this, the import of petrol, diesel and vehicles was US$ 4.3billion, she said. That’s a quarter of the total trade deficit.
To deter the number of imports, the government has slapped hefty taxes on luxury cars in a bid to control their numbers, said U Maung Maung Win, deputy minister for the Ministry of Planning and Finance.
Under the 2017 Tax Law, those who import cars with 4,000cc-engines must pay a special commodities tax of 30pc of the total purchase price, while those who import cars with engines of more than 4,000cc must pay 50pc. That’s excluding a 5pc commercial tax.
In 2016-17, the number of saloon cars imported totaled 47,779 vehicles worth US$395.5 million, while 261 vehicles worth US$9.2 million were imported for special purpose usage, according to the Union government’s National Plan Annual Report for 2016-2017.
“Promote exports”
Meanwhile, the government is actively promoting the export sector and development of local businesses in a bid to reduce the trade deficit, U Maung Maung Win said.
U Zone Hlal Htann, MP of No.4 Electoral Precinct, Chin Division, said the major obstacle in promoting exports in the place of imports is the lack of loan assistance. “People in other countries can loan and expand with K10 although they possess only K1. But in our country, one needs K10 to work for K1 value”, he said.
On this front, loans to facilitate agriculture exports are currently being drawn up, especially for coffee seeds planted in Ywangan Region of Shan Division and Pharlar, U Maung Maung Win said.
But Myanmar’s trade deficit is also exacerbated by its exports of natural gas, which is based on international prices. As a result of low oil prices over the last three years, revenues from Myanmar’s natural gas exports have fallen, said Dr Tun Naing, Deputy Minister in the Ministry of Electricity and Energy.”
“As it is sold according to international price, natural gas export revenues are down by 30pc to 40pc in 2016-17 compared to 2015-16,” he aded.
Source: Myanmar Times
