Tax Change to Challenge Myanmar Miners

SEATTLE (ITRI.CO.UK): The Wa State government has raised export tariffs on mineral products – including tin – as it attempts to navigate rising inflation. According to a document seen by ITA China, the Wa State Central Economic Planning Board raised the export tariffs on all mineral products from 25% to 30%. The new legislation came into effect from 1 July.

In the “Provisional Regulations on the Administration of Various Mineral Products in Wa State” formulated by the Wa State Government in 2006, the export tariff on mineral products is implemented at a rate of 30%. This tariff was temporarily reduced to 25% at a later stage to encourage investors to invest and reduce their investment costs. The Wa State Government believes that after more than a decade of development, investors have already recovered their costs and made substantial profits. However, the Wa State Government’s expenditure has been rising in line with the price of goods. Considering the market situation and the financial viability of the Wa State, the Wa State decided to reinstate the tariff on mineral exports from 25% to 30%. The flat-rate portion of the duty on low-value minerals will remain unchanged.

ITRI View: Despite falling output in recent years, Myanmar remains one of the world’s most important sources of tin, and a key supplier to Chinese smelters. Most of the country’s concentrate comes from mines within Wa State. Export tariffs are typically paid for in the form of tin concentrates, which lead to a significant stockpile held by the Wa Government. However, this was depleted this year due to sales at record tin prices. The increase in export tariffs will help the government to potentially re-establish its stockpile, but will squeeze the profit margins of local tin producers.

Courtesy: www. itri.co.uk