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GOVERMENT POLICY AND LEGISLATION ON INVESTMENT IN MINERALS
The national economic objectives stand as the policy framework in the mineral sector where it is stipulated to invite participation in terms of technical know-how and investment from sources inside the country and abroad. It is the policy in the mineral sector to boost up present production, to fulfill the growing domestic demand and to increase foreign exchange earnings. Mineral-wise emphasis is given for development of copper, gold, lead, zinc, iron and steel, coal, nickel and construction related industrial minerals such as cement making materials, dimension stones and aggregates.
The Union of Myanmar Mines Law was promulgated in September 1994 and Rules relating to the law followed in December 1996.
The Ministry of Mines is the government authority responsible for implementation of the policy, legislation and enforcement of law, rules and regulations in the mining sector.
According to the Myanmar Mines Law, all naturally occurring minerals found either on or under the soil of any land in the continental shelf are deemed to be owned by the State.
It is the policy of the Ministry of Mines not to make new investment on its own, but to encourage foreign and local investors to invest in the mining sector. Forms of agreement may be generally on production sharing basis or profit sharing basis based on equity contribution by both parties. Production sharing type of investment could either be straight split on total production or after cost recovery. Depending on case by case basis, Ministry of Mines is flexible whether to have majority, minority or equal participation in equity participation joint ventures.
Although there is no framework legislation for environmental protection as yet, measures for environmental protection are provided in the Myanmar Mines Law (1994) and the Myanmar Mines Rules (1996). One of the objectives of the Myanmar Mines Law (1994) is to protect the environmental conservation works that may have detrimental effects due to mining operations. Under Section 13 of the Myanmar Mines Law, it is mentioned that the holder of the permit shall comply with the rules prescribed under the Law in respect of making provisions for the environmental conservation works that may have detrimental effects due to mining operations.
FISCAL REGIME
(1) Dead Rent
Dead Rent according to the type of operations is shown in the table on page 87 Section 115 of Myanmar Mines Rules. Surface Rent is payable to the General Administration Department after acquiring Land Lease. The rent levied is minimal.
(2) Royalty
Royalty for metallic minerals is 3 to 4 % and 4 to 5 % for precious metallic minerals as prescribed in Chapter 6 of the Myanmar Mines Law. Royalty is levied on value of mineral sold.It is a sale based royalty and not a production based royalty. (Refer section 18 of the Myanmar Mines Law) Royalty may be exempted in whole or in part as may be determined by the Ministry of Mines.(Section 20 of the Myanmar Mines Law)
(3) Commercial Tax
Commercial Tax on export commodities is 8% payable in foreign currency. Commercial tax on export commodities may be exempted for up to (3) years upon applications for projects undertaken with MIC permit. There is no commercial tax on coal, if sold locally.
(4) Corporate Tax
30% corporate tax is levied on profit of an enterprise. For projects working under MIC permit an exemption of 50% may be granted if all products are exported.
(5) Custom Duty
Custom Duty for importing of mining machinery and equipment (eg, EME's, Rock Drills etc.,) ranges normally 1%.
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