Myanmar: Conflicting definitions of wood products to be taxed

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ITTO/Fordaq
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The Myanmar Internal Revenue Department has issued its decision on the definition of products that it deems are ‘Special Commodities’ and will attract the 10% tax which, it was earlier understood, would only apply to rough-sawn timber.

The decision by the Internal Revenue Department contradicts the definition decided by the Ministry of Natural Resources and Environmental Conservation (MONREC).

Under the MONREC definition, small sized sawnwood, plywood, veneer and furniture were deemed as non-special commodity and, as such, would attract no tax.

The timber industries and the Myanmar Forest Products Merchants Federation have raised this issue with the Internal Revenue Department as it seems their decision overruled both MONREC and definition in the legislation.

Manufacturers in Myanmar face many hurdles including uncertain availability of raw materials due to the reduction in harvests, higher costs related to meeting requirements of international buyers and now appear to be facing an additional tax burden.

Manufacturers in Myanmar have started to warn buyers in international markets that the new tax, if implemented without revision, will mean FOB prices must be raised.

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