MYANMAR INTRODUCES BONDED WAREHOUSING, LOWERS RAW MATERIAL IMPORT DUTIES
The customs department will introduce customs warehouses, or bonded warehouses – where goods can be stored without Value-Added Tax (VAT) or import duties – in the country, Finance Minister U Soe Win said on Friday. The aim is to align local customs warehousing procedures with international standards and reduce import restrictions on Myanmar goods, the cabinet minister explained during a meeting with Vice President U Myint Swe and business representatives. The tax reductions will involve lowering the advanced income tax burden and simplifying the logistics processes to save time..
(Source: The Myanmar Times, December 17, 2018)
Daizen, a Japanese logistics company, is the groundbreaking case for SEZ bonded warehouses in the country. As Colliers sees it, economic growth can accelerate by relieving cash flow due to retaining goods until transported to end-user when customs duty is then paid. Colliers welcomes the notion for increased import and export, and legitimization of existing cross-border trade with ASEAN economies such as India, Thailand, etc. Other industry players are watching closely and are developing locations for bonded warehouses (e.g. Kerry Logistics at East Dagon). As Myanmar's premier industrial park, it remains to be seen whether Thilawa SEZ's long-term economic role is to consolidate manufacturing or warehousing and logistics operations, or broad mix of functions. This will determine how other industrial estates will gain a foothold within Myanmar's industrial development.