Welcome to the third edition of BLP's monthly Myanmar update in 2018. We have distilled the top news items into this summary 'speed read'.
Myanmar’s parliament has elected U Win Myint as its 10th President. On 28 March 2018, Win Myint was voted to replace U Htin Kyaw as leader of the country, who stepped down on 21 March due to health reasons.
Myanmar’s president is elected from among the country’s three vice presidents, representing the lower house, the upper house and the military. U Win Myint, the lower house candidate, won an overwhelming majority with 403 out of 636 votes, almost twice as many as the military backed candidate Myint Swe, who came second with 211 votes. The third candidate, Henry Van Thio, received 18 votes. This substantive victory means that the National League for Democracy (“NLD”) representative received numerous votes and support from other parties, as well as his own.
U Win Myint, who was formerly the speaker in the lower house of parliament, studied Geology at Yangon University, before practicing as a lawyer in the High Court of Myanmar in the 1980s. He was then part of an opposition revolt in 1988 against Gen Ne Win, alongside the State Counsellor Aung San Suu Kyi, which led to him being briefly jailed by the military junta. He became a member of the NLD executive committee in 2010.
In advance of the Myanmar Companies Law 2017 (the “Companies Law”) coming into force on 1 August 2018, the Directorate of Investment and Company Administration (“DICA”) has published draft application forms for incorporation of new companies.
DICA is in the process of establishing a new electronic company registry system, Myanmar Companies Online (“MyCO”) which is intended to be place by 1 August, 2018 to coincide with the commencement of the Companies Law.
In advance of MyCO going live, DICA has released draft sample application forms which set out the proposed requirements to incorporate a range of domestic and foreign companies. Further information on the new MyCO registry system, company filing forms and fees will be released by DICA in the coming months.
The Yangon Regional Government has formed the New Yangon Development Co Ltd (“NYDC”) to develop a new city on the west bank of the Yangon River. The new city will be called “Yangon Myothit” and will be twice as big as Singapore once it is completed, covering approximately 20,000 acres.
The NYDC is fully owned by the Yangon Regional Government and was incorporated under the Special Companies Act with a capital of 10bn kyats (US$7.5m), according to Daw Nilar Kyaw, chairman of the NYDC and Yangon Regional Minister for Electricity, Industry and Transport.
The launch of the NYDC took place at the Lotte Hotel in Yangon on 31 March 2018. The invitation to the launch described the vision of the new Yangon city as “a safe, smart and clean city that will serve as an example of efficiency, integrity and accountability.”
According to Phyo Min Thein, Phase 1 of the project, the infrastructure development phase, is expected to cost over US$1.5 bn. Phase 1 will include the development of five villages and townships, two bridges, main roads, industrial zones, a power plant, power stations and water and sewage treatment plants.
The timeframe of the project and the tendering process for construction works are still to be announced.
The Asia Foundation has released a new study on the attitudes towards taxation in Myanmar. The report is based on a survey that the Asia Foundation and Yangon School of Political Science conducted last year.
The aim of the study was to track public perceptions of the Myanmar taxation system, with a focus on the attitudes of urban citizens in Myanmar. The survey polled 1,400 citizens living across three cities in Myanmar and focused on the three main taxes in Myanmar: income tax, commercial tax and property tax.
The report found that, in general, Myanmar’s urban citizens are not against taxation and would be willing to pay higher taxes if they saw improvement within the government. However, the report also showed that urban citizens have a poor understanding of the tax system within the country and they wanted more information to be available on the taxes they are supposed to pay and how the government spends taxes. Finally, the report found that property tax is the most prominent tax in Myanmar. It is also perceived as the fairest of the three main taxes, which could correlate to why it is the most widely paid tax.
As a result of its findings, the report makes a number of recommendations to the Myanmar government. These are based on the ideas of education, accountability and transparency. The recommendations include keeping the tax system simple, educating citizens on how the tax system works and improving transparency on how the government spends taxes, through the use of publications and further studies.
As part of the National Electrification Plan, the Rural Development Department – in partnership with the German Development Bank – will invite tenders to assist with the deployment of €9m to roll out rural electrification projects in Shan State (South). The projects will largely consist of solar home systems for private dwellings and aims to electrify more than 10,000 houses.
Rural electrification and mobilisation of privately operated mini-grids is an area gaining increasing attention. This month saw Yoma Strategic announce plans to raise up to US$28m to roll out rural electrification projects in Myanmar using an “anchor tenant” such as a teleco tower operator as the primary offtaker with surplus power being supplied – via a mini grid – to surrounding villages.