Tuesday, September 19, 2017

YSX-listed firms to enjoy 5pc tax reduction

Companies listed on Yangon Stock Exchange (YSX) will now need to pay only 20pc income tax, according to the Ministry of Planning and Finance.

A list of 55 companies including those listed on the YSX will soon be tradeable on the OPC market. The Myanmar TimesA list of 55 companies including those listed on the YSX will soon be tradeable on the OPC market. The Myanmar Times

The stock exchange needs more companies to be on board in order for the stock market to grow and develop. Hence, a 5pc tax discount has been offered to those firms in order to attract more companies to join the YSX.

The Union Tax Law instructs that corporate income tax is 25pc. But for YSX-listed firms, income tax will only be 20pc. In addition, those listed firms will be exempted from fines and penalties if they pay the remaining payable tax after disclosing the revenue, the law stated.

“The main purpose is to attract more listed companies by providing a tax incentive.

“The tax rate here is a bit high when compared to other countries in the region.

“But taking into account the situation and conditions in our country, the ministry might have decided an appropriate rate,” a member of Securities Exchange Commission of Myanmar (SECM) U Htay Chun said.

Tax rates of as low as 5pc is imposed on listed companies in some of the other countries within the region, he continued.

Capital market expert Dr Aung Thuya added that more companies need to join the YSX before the stock market can grow and develop in Myanmar.

With more listed companies, there will be more opportunities for capital market investors and the government will receive more tax revenues as those firms have to disclose income conditions, he said.

At present, there are only four YSX-listed companies and these are First Myanmar Investment (FMI), Myanmar Thilawa SEZ Holdings (MTSH), Myanmar Citizens Bank (MCB) and First Private Bank (FPB).