Myanmar: Government exempts emeralds and diamonds from Special Commodity Tax
The government has decided to exempt emeralds and diamonds from Special Commodity Tax (SCT) with immediate effect. Raw and uncut emeralds and diamonds were taxed at the rate of 10% and their processed and cut variants were taxed at the rate of 5% until recently. Further, the government has abolished the 5% commercial tax on gold nuggets.
The government expects the tax exemptions will lead to a decline in the smuggling of the mentioned items and lead to an increase in their import through legal channels. The tax waivers are also expected to provide a much needed boost to the country’s gems and jewellery sector.
Thailand: Reduced VAT rate extended for another year
The Thai government has decided to extend for another year the country’s reduced VAT rate of 7%. Thailand’s statutory VAT rate was fixed at 10% when the levy was first introduced in 1992. However, following the Asian Financial Crisis of 1997-98, the rate was cut to 7%. Successive governments have maintained the reduced rate since then through yearly extensions.
Reports had earlier indicated that the VAT rate will be increased to 8% this year but the government stated that it was necessary to maintain the same reduced rate in order to sustain spending power and support economic recovery. The decision to maintain the same rate will reportedly cost the country THB 210 billion (US$6.3 billion) in lost revenue. As such, the 7% rate will continue until 30 September 2018 unless extended.
Indonesia: Government plans to cut taxes on sedans to spur sales
The Indonesian government is planning to cut sales tax on sedans in an effort to spur domestic sales. Sedans are currently regarded as a luxury good and are taxed at 30 to 40%. This has made sedans less attractive to both consumers as well as vehicle manufacturers in the country. On the contrary, sales of other vehicle categories such as multi-purpose vehicles (MPVs) have increased owing to lower tax rates of 10 to 20%.
The tax cuts are being proposed as part of amendments to Indonesia’s Value Added Tax and Luxury Goods Sales Tax Law, which is expected to be passed by Indonesia’s parliament soon. The government expects the reduced taxes to lead to higher sales of sedans and lead to increased investment in the country’s automotive sector. The exact nature of the tax cuts have not yet been announced.
Dezan Shira & Associates Brochure
Dezan Shira & Associates is a pan-Asia, multi-disciplinary professional services firm, providing legal, tax and operational advisory to international corporate investors. Operational throughout China, ASEAN and India, our mission is to guide foreign companies through Asia’s complex regulatory environment and assist them with all aspects of establishing, maintaining and growing their business operations in the region. This brochure provides an overview of the services and expertise Dezan Shira & Associates can provide.
An Introduction to Doing Business in ASEAN 2017
An Introduction to Doing Business in ASEAN 2017 introduces the fundamentals of investing in the 10-nation ASEAN bloc, concentrating on economics, trade, corporate establishment, and taxation. We also include the latest development news for each country, with the intent to provide an executive assessment of the varying component parts of ASEAN, assessing each member state and providing the most up-to-date economic and demographic data on each.
In this issue of ASEAN Briefing magazine, we provide an introduction to the Philippines as well as analyze the various market entry options available for investors interested in expanding to the island nation. We also discuss the step-by-step process for setting up a business entity in the Philippines, highlighting the various statutory requirements for overseas investors. Finally, we explore the potential for Singapore to serve as a viable base to administer investors’ Philippine operations.