Myanmar eases car import with New Car Import Regulations
New Regulations for importing cars spark rush at state-run banks in Myanmar
On May 7th 2011, the minister of Commerce in Myanmar, Mr Win Myint, announced that all citizen who have a foreign currency account in some specific state-run banks would be allowed to import cars manufactured from year 2007 onwards with better conditions.
Authorities suggested that taxes would be cut for all vehicles manufactured from year 2007 with smaller engine capacity. Thus, cars with engine capacity of 1350cc or less would be subject to 105% tax on the CIF value. Taxes would amount to 145% for cars with an engine size between 1350cc and 2000cc, and 165% for cars with an engine size bigger than 2000cc.
The new regulations give satisfaction to many Myanmar citizens who were angry that only sailors or foreign workers with foreign currency accounts had the right to import vehicles.
It has been reported that many citizens, from both private and public sectors, have come to open foreign currency accounts, triggering a sharp increase in the demand of US dollars and a weakening of the local currency, the Kyat. The state-run banks where foreign currency accounts can be freely opened are the MFTB in Yangon, the Myanmar Economic Bank and the MICB in Yangon and Mandalay.
Fortunately, if the old car substitution rule proclaimed last year has been cancelled to be replaced by the new regulations, the holders of a permit for car substitution can still use it to import a car made between 1995 and 2006.
The automobile industry has undergone significant changes since September 2011, when the government first allowed private importing of automobiles. Data provided by the Ministry of Commerce to April 8, 2013 shows that a total of 145,796 vehicles have been imported under the new regulations, at a value of nearly US$1 million. Of the imports, 80 percent were cars and the remainder either buses or trucks. The totals include nearly 70,000 vehicles imported as part of the overage car import substitution programs, while 61,000 were brought in by foreign currency earners and individual importers, and just under 15,000 were imported by sales centres.
In January 2012, the government allowed foreign currency earners such as sailors, diplomats and trading companies to import cars. In addition, as of last May, every citizen holding a foreign currency account at a bank in Myanmar can individually import a car with an engine no larger than 1350 cubic centimetres in capacity and made in or after 2007, with no import tax charged.