PwC MyanmarWeekly Business Intelligence

Issue 16224 May 2019

www.pwc.com/mm

PwC | May 2019

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PwC | May 2019

1. Weekly Key Financial & Business News

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PwC | May 2019

Weekly Key Financial & Business NewsHeadlines

Smart meter project said to reduce power outages, but approval needed

New 145 MW power plant opens in Kyaukse

Google ban on Huawei a potential problem for Myanmar: users

Ground Surveys Begin for Htantabin Industrial Zone

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Hantharwaddy Airport Could Finally Takeoff

PwC | May 2019

Weekly Key Financial & Business NewsHeadlines

Trade between Myanmar, Thailand at optimal levels: official

Forex reserve levels appropriate: Central Bank

US and Japan should be strategic partners in Myanmar, report says

Inflation higher than expected in first half of 2018-19

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Myanmar sets a slower pace for the Belt and Road

PwC | May 2019 6

New 145 MW power plant opens in Kyaukse

A power plant capable of producing 145Megawatts of power opened in Belin, KyuakseTownship in Mandalay on May 17.The power plant will use 30 million cubic feet perday of domestically produced natural gas from theShwe offshore gas field. The plant opens a yearafter Power Kyaukse Company won the tender forthe project under a build, operate and transferarrangement in May 2018, said U Win Khaing,Union Minister of Electricity and Energy (MOEE).Around 90 percent of the electricity produced bythe plant will be distributed to the Mandalayregion through the Mandalay industrial zonesubstation and Aung Pin Lae power substation.The region is the second biggest consumer ofelectricity in Myanmar.Mandalay is currently producing a total of1396MW of electricity through hydro and othergas-powered projects. This is enough to supplypower to the region and the surplus is beingdistributed to other regions and states, U WinKhaing said.Around 60 percent of Mandalay region - 30 cities,3,632 villages and more than 780,000 households

– currently have access to electricity. This willincrease to 65pc in 2020, according to the MOEE.“Power consumption in the region has increasedin tandem with higher living standards. Around1000 more villages at the fringes still requireaccess to electricity. We are trying to provideelectricity to them as well,” said regional chiefminister U Zaw Myint Maung.At the opening ceremony of the plant, StateCounsellor Daw Aung San Suu Kyi said access toelectricity is one of the basic requirements for thenation’s development. Currently, less than halfthe country enjoys that access.“We expect to be able to supply 50pc of therequirements by the end of this year. We havebeen trying from 30pc in 2016 to 50pc by the endof this year. We expect Myanmar to be fullyelectrified by 2025,” she said. U Win Khaing saidhe expects full electrificationin 2030 and despitean increase of 350MW in power production thisyear, the shortage was 400MW.Source: Myanmar Timeshttps://www.mmtimes.com/news/new-145-mw-power-plant-opens-kyaukse.html

NewspapersMyanmar Times

20 May 2019

PwC | May 2019 7

Smart meter project said to reduce power outages, but approval needed

Yangon city wants to roll out state-of-the-artsmart meters to control the electricity supply,monitor its usage and bill consumers in oneautomated system, said U Myo Aung, founder ofEver Company.This system reduces transmission wastage,manages maintenance and significantly reducesthe margin for human inaccuracy. “It eliminateshuman error and substantially lessens theopportunities for corruption,” U Myo Aung said.While supported by the regional government, theproject is still awaiting approval from the Ministryof Energy and Electricity (MOEE).The smart meters – part of a system calledAdvanced Metering Infrastructure (AMI) – weredeveloped by Ever and have now been introducedinto two central Yangon townships: Daw Boneand Pabedan. There, all power passes throughthese meters Ever has installed, is measured andthe bills prepared and distributed.Payment is also arranged through a digitalbanking facility, using a mobile phone applicationcalled MeBill. Non-payment is also regulatedthrough this system, and defaulters will have their

supply automatically cut. At present, according tothe government’s regulations, they have to paywithin five days of receiving the bill.AMI has been in place in Daw Bone since August2017 and Pabedan since December last year. Ithas already reduced losses in Daw Bone by 10pc,saving K27 million a month, and in Pabedan by20pc, saving some K43 million a month, U MyoAung said. There are 21,000 meters in Daw Boneand 159,000 meters in Pabedan. Between 2012and 2015, Ever has installed some 600,000analogue meters in Yangon for US$2.6 million,funded by cost savings and cutting losses. Sincethen, nearly half Yangon’s meters have alreadybeen upgraded to digital. Now, Ever is trying toget the Yangon regional government to upgrade todigital meters throughout the rest of Yangon. Thiswould involve some 700,000 meters. The localauthorities are enthusiastic, but the MOEE mustfirst approve the move.Source: Myanmar Timeshttps://www.mmtimes.com/news/smart-meter-project-said-reduce-power-outages-approval-needed.html

NewspapersMyanmar Times

20 May 2019

PwC | May 2019 8

Google ban on Huawei a potential problem for Myanmar: users

Google has barred China’s Huawei, the world’ssecond biggest smartphone maker, from some itsAndroid operating system.The company will immediately lose access toupdates to Google’s Android operating system.Future versions of Huawei smartphones that runon Android will also lose access to popularservices, including the Google Play Store, Gmail,Google Maps and YouTube apps. New designs ofHuawei smartphones are set to lose access tosome Google apps.Existing Huawei smart phones will continue tohave access to Google-related apps, but futureHuawei tablets and mobile handsets will not becertified by Google.The move comes after US President DonaldTrump added Huawei to a list of companies thatUS firms cannot trade with unless they have alicence, amid an escalating trade war between thetwo countries.Google said it was “complying with the order andreviewing the implications”. “We will have tofollow the demand by the US government.Existing Huawei users will be able to use the

services and updates provided by Google,” aspokesperson from Google told the BBC.In a May 20 statement it said it had made“substantial contributions to the developmentand growth of Android around the world. As oneof Android’s key global partners, we have workedclosely with their open-source platform to developan ecosystem that has benefitted both users andthe industry. Huawei will continue to providesecurity updates and after-sales services to allexisting Huawei and Honor smartphone andtablet products.”Huawei has a strong global market share businesslinks in 170 countries, including Myanmar. It hasa 28pc share of the domestic smart phone market,making it the second-largest mobile phoneprovider in the country. In the first quarter of2019, over 53 million Huawei phones were sold,according to the company.

Source: Myanmar Timeshttps://www.mmtimes.com/news/google-ban-huawei-potential-problem-myanmar-users.html

NewspapersMyanmar Times

21 May 2019

PwC | May 2019 9

Ground Surveys Begin for Htantabin Industrial Zone

The Yangon Regional Government has begunsurveying ground in Htantabin Township, in thewestern area of Yangon. This is the first step inthe process of constructing the HtantabinIndustrial Zone, according to the township’sAdministration Office.Htantabin Industrial Zone will be the first of 11such zones to be built under the oversight of theYangon Regional Government. This particularzone will be built on over 1,000 acres of land inthe Htantabin Township.According to the Yangon Regional Government,the Htantabin Industrial Zone project will becompleted in two phases. Overall, some 150,000job opportunities are expected from it.A consortium of companies, both local and fromHong Kong and Taiwan, signed a Memorandumof Understanding [MoU] for the $500 millionproject on May 10, at the Yangon InvestmentForum 2019.Yangon is comprised of some 45 townships, 33 ofwhich are administered by the Yangon CityDevelopment Committee (YCDC) as Yangonmunicipal areas. In June 2018, Yangon Regional

Parliament approved the proposal for developingnew industrial zones in 11 townships outsideYangon municipal areas as part of a new urbandevelopment master plan.The industrial zones are to be set up in the 11zones outside of the municipal areas, all in anattempt to reduce the development gap betweenthe areas administered by the YCDC and areas itdoes not oversee. Besides Htantabin, the tenother townships selected are Kawhmu,Kungyangon, Twanty, Thanlyin, Kyauktan, Kayan,Thongaw, Taikkyi, Hmawbi, and Helgu.“We are holding discussions with other investorswho are interested in making investments inother industrial zones in Yangon,” said Naw PanThinzar Myo, the Yangon Regional Minister forKaren Ethnic Affairs.There are 29 existing industrial zones in Yangon,in addition to the Thilawa Special Economic Zone.

Source: Myanmar Business Todayhttps://www.mmbiztoday.com/articles/ground-surveys-begin-htantabin-industrial-zone

NewspapersMyanmar Business Today

21 May 2019

PwC | May 2019 10

Hantharwaddy Airport Could Finally Takeoff

The much delayed Hantharwaddy InternationalAirport project is back on track and will now beimplemented with financial assistance fromJapan, according to U Win Khant, PermanentSecretary of the Ministry of Transportation andCommunication.Th national level project is expected to improvethe country’s aviation capacity.“This airport is essential to our country, and weare trying to push forward with assistance fromJapan,” he said at a press conference by theministry.The new airport will be built on 9,000 acres ofland in Bago, 80 kilometers away from Yangon.The government originally invited tenderapplications for construction of the airport in2012, and awarded the project to a consortium ofcompanies, which included Japan’s JGC,Singapore’s Yangnam Holdings, and ChangiAirport International.However, after the agreement expired in January2018, Yangonam Holdings issued anannouncement in February 2018 saying that thenegotiation for extending the agreement is not

going well.Eventually the negotiations fell throughcompletely, and the government decided toimplement the project under government togovernment program instead. Myanmar isplanning to obtain an official developmentassistance (ODA) loan from Japan to develop the$1.5 billion airport.The project is being designed in three phases.Completion of Phase No. 1 is expected toaccommodate up to 12 million passengers peryear. Phase No. 2 will increase capacity to 20million, and Phase No. 3 will top out the facility at30 million passengers per year once fullycompleted.As a comparison, Atlanta International Airport(ATL) in Georgia, USA is the world’s busiestairport, servicing over 107 million passengers ayear. The world’s top 50 busiest airports allwelcome over 42 million passengers a year.

Source: Myanmar Business Todayhttps://www.mmbiztoday.com/articles/hantharwaddy-airport-could-finally-takeoff

NewspapersMyanmar Business Today

21 May 2019

PwC | May 2019 11

Forex reserve levels appropriate: Central Bank

Myanmar’s foreign exchange reserves arecurrently at an appropriate level, U Soe Thein,vice governor of the Central Bank of Myanmar(CBM) said on May 17. He did not disclose theexact amount of the reserves, saying that theCentral Bank only reveals whether levels haveincreased or decreased.He said that the country’s forex reserve is deemedappropriate if it is equivalent to three months’ itsimport value. “Myanmar’s forex reserves meet thethree-month import value benchmark. So, it canbe said to be appropriate,” he said.According to the Ministry of Commerce, theimport value of Myanmar from October 1, 2018 toJanuary 4, 2019 was more than US$4.7 billion.At the press conference, U Soe Thein added thatinflation targets are “impossible to reduce at thispoint,” and that “prices need to be stable andmore financial sector development” before thetarget is reduced, which would pave the way forlower interest rates. The current annual inflationrate is 7.3pc, according to the CBM.He added that there is no plan to reduce bankinterest rates as current interest rates are still

suitable.

Source: Myanmar Timeshttps://www.mmtimes.com/news/forex-reserve-levels-appropriate-central-bank.html

NewspapersMyanmar Times

21 May 2019

PwC | May 2019 12

Trade between Myanmar, Thailand at optimal levels: official

Khun Pakainay Leng-Ee, who was Thailand’sMinister Counsellor for Commercial Affairs toMyanmar from October 4, 2015 to May 15, 2019,reckons the two neighbouring countries havereached an optimal level of trade. “I think we’vereached the best situation now,” he said.Among the main goods exported to Thailand arecar parts and components, which are used toassemble vehicles at Thai car factories and laterexported. Myanmar also exports natural gas,meat, natural resources, aquaculture products,vegetables, timber and other wood products to itsneighbour.Meanwhile, it imports edible oil, soft drinks,metals, agricultural wars, carpets, car parts,cosmetics, skincare products, wheat, instant foodsand plastic products from Thailand.Last year, Myanmar exports to Thailand rose byover 20 percent compared to the year before.During the period, trade volumes betweenMyanmar and Thailand totaled some 70 billionbaht (K3.3 trillion), according to Khun PakainayLeng-Ee.In a parting interview with The Myanmar Times

last week, Khun Pakainay Leng-Ee shared hisviews on how Myanmar can foster even bettertrade relations with Thailand and encouragefurther investments from its neighbour and othercountries. Here is an excerpt of that interview:How can both countries further improve trade?Myanmar is rich in resources like rubies,sapphires, jade and pearls. Thais come to buythese because they are not available in Thailand.What is needed here is technology. Raw productsfrom Myanmar combined with Thai technologiesand expertise can be exported to the world.The foundation of improvement in any sector iseducation. To improve important export sectorssuch as agriculture and manufacturing inMyanmar, better education is important. TheMyanmar government should invest in theeducation sector.

Source: Myanmar Timeshttps://www.mmtimes.com/news/trade-between-myanmar-thailand-optimal-levels-official.html

NewspapersMyanmar Times

22 May 2019

PwC | May 2019 13

US and Japan should be strategic partners in Myanmar, report says

There is room for Japan and the US to strengthentheir economic cooperation and human rightspolicies in Myanmar, a recent study finds.“We believe it is both vital and feasible for theUnited States and Japan to simultaneouslyadvance both their economic and human rightsobjectives in Myanmar,” said a report publishedby two think tanks, Washington DC-based Centerfor Strategic and International Studies (CSIS) andTokyo-based the Asia Pacific Initiative (API).The study “The Article II Mandate Forging aStronger Economic Alliance between the UnitedStates and Japan” proposes strategies the twocountries can implement to improve theireconomic partnership in third countries andfurther align shared interests, and includesMyanmar as a case-study.“By strengthening infrastructure, human capacity,and governance practices, Myanmar will becomea stronger, more democratic, more stable nation,better able to negotiate relations with largeneighbours, such as China, on its own terms,” itconcluded.Myanmar, US and Japan

Myanmar has established diplomaticrelationships with the two countries for morethan half a century – the US since 1947 (72 years)and Japan since 1954 (65 years).Both are among the top 10 trading partners ofMyanmar for 2018 (from April to September),according to data from the commerce ministry.Japan is ranked third, whereas the US is rankedninth. Trade between Myanmar and the UStotalled over US$455.7 million in the six-monthtransitional period, while trade volume withJapan topped more than $1 billion. Overall,though neither country is anywhere near China’strade. During the same period, external tradevolume between China and Myanmar reached arecord high of $18.3 billion.Myanmar’s transition to democracy is met withchallenges from various fronts.

Source: Myanmar Timeshttps://www.mmtimes.com/news/us-and-japan-should-be-strategic-partners-myanmar-report-says.html

NewspapersMyanmar Times

23 May 2019

PwC | May 2019 14

Inflation higher than expected in first half of 2018-19

Inflation in the first six months of the currentfiscal year of 2018-19 exceeded the government’sforecast by 2.7 percent, U Maung Maung Win,deputy minister of the Ministry of Planning andFinance, said at the Pyidaungsu Hluttaw meetingheld yesterday.Inflation averaged 7.3 percent during the sixmonth period ending in March compared to thegovernment’s estimate of 4.6pc.Inflation was 4pcin 2017-18 and 6.8pc in 2016-17.“Inflation was higher than expected due to thedepreciation of the Myanmar kyat against thedollar,” he said in his report.During the same period, Myanmar’s GDP stood atK67.2 trillion, just 63pc of the K106.1 trilliontarget. “There was a decrease in natural gasproduction and public construction projects wereonly at the starting phase,” U Maung Maung Winsaid.While growth in the agriculture sector alsodeclined for the period, Myanmar sawimprovements in the industrial and servicesectors.Although foreign direct investments (FDI) rose by

US$1.9 billion compared to the same period in2017-2018, it is still less than the same period in2016-2017. FDI totaling US$5.6 billion waschanneled into the country in 2016-2017.Exports for the period amounted to US$8.3billion compared to imports of almost US$8.9billion, resulting in a trade deficit of US$650millionExports consisted mainly of finished garments,natural gas, beans, ores, metals and rice while themain imports were oil and oil-related products,machinery, silk, construction materials, vehiclesand spare parts.During the six months, more than 2.1 milliontourists entered the country and spent US$1.1billion, said U Maung Maung Win.

Source: Myanmar Timeshttps://www.mmtimes.com/news/inflation-higher-expected-first-half-2018-19.html

NewspapersMyanmar Times

24 May 2019

PwC | May 2019 15

Myanmar sets a slower pace for the Belt and Road

PRECIOUS little information has emerged aboutthe agreements that Myanmar signed late lastmonth at the Belt and Road Forum in Beijing.Myanmar signed a handful of agreements at theforum, including two memorandums ofunderstanding, an economic and technicalcooperation agreement, and an “early harvest”project list. Neither government has releaseddetailed information on the contents of theseagreements, including whether they are bindingin any way.The bigger story from the Belt and Road Forum,which fell April 25-27, appears to have been whatMyanmar didn’t sign.Sources within and close to the government, aswell as in the diplomatic and businesscommunities, have told Frontier that China hadbeen pressuring Myanmar before the forum tosign a number of project-specific agreements,including for some “controversial” projects.The Myanmar government refused to sign theagreements at the Belt and Road Forum, citingthe need to conduct further assessments on theproposed projects, and instead committed only to

more general MOUs.The sources were unable to confirm the number,indicating it could have been four to six additionalagreements.China responded to this rejection by “dipping intoits pocket”, as one government source put it, andinstead proposing the economic and technicalcooperation agreement with the grant.Before the forum “all sorts of hand grenades werebeing thrown around, on Myitsone for example”,said Mr Sean Turnell, an economic adviser toState Counsellor Daw Aung San Suu Kyi. “Maybeit is just part of the usual thing you do before a bigmeeting – get all the ambit claims out there. Butin the meetings themselves [in Beijing], theatmospherics were good.”Turnell described it as a “fantastic” outcome forMyanmar. “The Chinese essentially agreed withthe position here – that a lot of these projects aregood but it’s up to the governments to negotiatethem project by project,” he said.Source: Frontier Myanmarhttps://frontiermyanmar.net/en/myanmar-sets-a-slower-pace-for-the-belt-and-road

NewspapersFrontier Myanmar

24 May 2019

PwC | May 2019

2. Weekly Key Policy News

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PwC | May 2019

Weekly Key Policy NewsHeadlines

Central bank issues warning against cryptocurrency trading

Foreign bank subsidiaries allowed to provide retail services

Tax on mobile phones kicks in June 1

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Advanced income tax on imports, exports reinstated after one year

Union Gov’t Office Minister Unveils Reform Plan for GAD

PwC | May 2019 18

Central bank issues warning against cryptocurrency trading

Local investments in cryptocurrency have beenrising, according to experts in the financial sector.But unlike overseas, where exchanges and crypto-news aggregators publish transaction data on adaily basis, the numbers are more difficult totrack in Myanmar.To contain the risks, the Central Bank ofMyanmar (CBM) earlier this month announcedthat it does not recognise cryptocurrencies as anofficial currency and that financial institutions inMyanmar are not allowed to accept or facilitatetransactions involving digital currencies.ryptocurrency valuations have been volatile sincethey began trading in recent years. On April 1, theprice of one bitcoin jumped 18 percent toUS$4,900 in just 24 hours and closed the monthat US$5200. Staying above the much-vauntedUS$5,000 level was important, manycommentators argued, to form the support levelfor the next bull-run. Myanmar buyers withaccess to an online payment method bought intothe rising trend and local advertising forexchanges became more frequent on social media,which alarmed the CBM.

This is because cryptocurrency is not tangible inthe way that government-issued kyats, baht, yenor dollars are. Unlike gold or silver – metalstraditionally used to hedge against inflation – ithas no physical properties.Bitcoin is one of the first cryptocurrencies to gaintraction. It attracted a first major wave ofinvestment frenzy back in 2011, a few years afterthe currency’s invention.In late 2017 the cryptocurrency marketexperienced a massive run-up in price, withbitcoin leaping towards an all-time high ofUS$19,500 in December that year. Investmentsflooded into the market, seeing the alt-coinmarket mature alongside lots of scam investmentschemes and questionable Initial Coin Offerings.U Aung Aung, an IT manager at an internationalcompany in Yangon, first considered buyingcryptocurrency back in 2017 – after aconversation with a foreign colleague.Source: Myanmar Timeshttps://www.mmtimes.com/news/central-bank-issues-warning-against-cryptocurrency-trading.html

NewspapersMyanmar Times

20 May 2019

PwC | May 2019 19

Foreign bank subsidiaries allowed to provide retail services

The Central Bank of Myanmar (CBM) will allowforeign banks to open branches in the country tohelp local businesses gain access to financing,deputy governor U Soe Thein said during a pressconference on May 17.This includes subsidiaries of foreign banks. “Wewill allow more foreign bank branches to open upto a suitable extent. Foreign bank subsidiaries willalso be allowed in accordance with the law,” hesaid.The development comes after the CBM in recentmonths permitted the 13 foreign banks currentlyoperating in Myanmar to open new branches andlater removed restrictions prohibiting them fromlending to local businesses.The restrictions were lifted to enable localbusinesses to gain better access to loans forexpansion and to improve their financialconditions, U Soe Thein said.Foreign subsidiaries will be awarded moreopportunities than branches. “Retail banking willalso be permitted for subsidiaries. Foreignsubsidiaries will have full permission to functionas local banks,” said U Soe Thein.

Existing branches of foreign banks will also bepermitted to operate as subsidiaries.“The difference is a branch can be shut downeasily if needed whereas for subsidiaries, whichare set up separately, it can sell, transfer or dividethe shares,” U Soe Thein said.Foreign banks have also been permitted to investup to 35 percent of the total amount of capital ifthe local private banks want to establish jointventures with them.

Source: Myanmar Timeshttps://www.mmtimes.com/news/foreign-bank-subsidiaries-allowed-provide-retail-services.html

NewspapersMyanmar Times

20 May 2019

PwC | May 2019 20

Tax on mobile phones kicks in June 1

Starting June 1, a five percent commercial tax onmobile phones and accessories shall be collectedfrom buyers at the time of purchase and therelevant tax stamps affixed to the receipts inaccordance with the Commercial Tax Law, theInternal Revenue Department (IRD) announcedearlier this month.The department issued the instruction to clarifydisputes among phone importers and retailersafter the taxes were announced earlier this year.The ruling means that retailers collect taxes fromthe buyers and then repay this to the IRD.However, the tax does not necessarily apply to allbrands.“As Samsung pays import fees as well as othertariffs and taxes imposed by the government,buyers need not pay additional taxes. There willbe no price hike on Samsung products,” said KoZarni Win Htet, Samsung Myanmar’s head of ITand Mobile Group.For other local distributors though, the additionaltaxes, are likely to have a negative impact onsales.U Ko Ko Aung, CEO of phone retailer Lu Gyi Min,

said that he accepts the tax and it should beexplained to the consumers. He added though,that the government should ensure that allretailers obey the system“If some shops follow the law and some don’t,market competition is not fair. The governmentshould ensure law enforcement and encourage allto follow the law,” he said.“Phones are expensive goods so the governmentshould also educate business owners and buyersso that they follow the law,” he added.The tax that is to be paid by the buyers and sellersis a burden, said Ko Zin, assistant director fordigital marketing of phone accessories retailerREMAX. “The government should take actionagainst the vendors who sell handsets withoutpaying taxes,” he said.There many companies that import handsets tosell locally. The most popular brands are Huawei,Oppo, Samsaung, Xiaomi, Apple, Vivo, Realmeand One plus.Source: Myanmar Timeshttps://www.mmtimes.com/news/tax-mobile-phones-kicks-june-1.html

NewspapersMyanmar Times

21 May 2019

PwC | May 2019 21

Advanced income tax on imports, exports reinstated after one year

Companies involved in imports and exports willbe required to pay an advanced income tax (AIT)of 2 percent from May 1, according to Notification38/2019 issued by the Ministry of Planning andFinance on April 8.This voids a previous notification issued onJanuary 22, 2018 exempting companies under theself-assessment system (SAS) from the 2pc AIT.The move “is likely to mean greater tax costs, evenin the short term, for exporters that are under thelarge taxpayers office and medium tax office 1,”said Thomas Chan, Partner, Tax and Regulatoryat KPMG Myanmar.U Min Htut, director general at the InternalRevenue Department (IRD), said the 2pc AITexemption had been revoked after some traderswere found to be exporting goods at the borderusing the names of companies under the SAS totake advantage of the exemption.“We have also received requests from smallbusinesses claiming that there the exemption onlarger taxpayers is unfair competition. Thereforethe government has revoked the exemption onexports by large tax payers and medium tax

payers and since May 1 and AIT will be leviedequally on all exporters,” he said.U Nay Lin Zin, secretary of the Myanmar RiceFederation Association, said levying the sameamount of AIT on all companies can beburdensome, particularly for some small andmedium enterprises who struggle to stay abovewater.“The government should reconsider its move andimplement a more comprehensive system of taxbased on profit levels,” he said.AIT are collected by the IRD every three monthsand are meant to offset against annual corporateincome taxes.

Source: Myanmar Timeshttps://www.mmtimes.com/news/advanced-income-tax-imports-exports-reinstated-after-one-year.html

NewspapersMyanmar Times

22 May 2019

PwC | May 2019 22

Union Gov’t Office Minister Unveils Reform Plan for GAD

YANGON—U Min Thu, minister for the Office ofthe Union Government, has unveiled theministry’s reform plan for the GeneralAdministration Department (GAD), whichincludes revisions of the department’s staffmanuals and code of conduct, and the curriculumof the Institute of Development Administration.Four months after the military transferred controlof the department to the Ministry of the Office ofthe Union Government, the minister held ameeting on Wednesday with GAD staff in theNaypyitaw Union Territory, which contains thecapital of Myanmar.According to the Ministry of Information, U MinThu said the first three months after the transferwere devoted to the physical requirements oftransferring control. This has been followed by asecond three-month period in which thedepartment’s core functions are being reformed.U Min Thu said he would form a ministry-levelRegulatory Review Unit to revise staff manualsand the code of conduct, and review existingdirectives and protocols for any necessaryamendments. The review unit will comprise two

members of the ministry’s advisory board andstaff from the ministry and the GAD.He said the department is also speeding up effortsto revise the Institute of DevelopmentAdministration (IDA)’s curriculum to meetinternational standards.The IDA provides leadership, administration andmanagement training to GAD staff.“We are discussing policies to ensure the systemof promotions and transfers of GAD staff and itshuman resources management are transparentand systematic,” the minister added.Formerly overseen by the Ministry of HomeAffairs (MOHA), for more than 30 years the GADhas formed the backbone of Myanmar’s publicadministration. Under the 2008 Constitution,MOHA is one of three ministries led by major-generals appointed by the commander-in-chief ofthe armed forces.

Source: The Irrawaddyhttps://www.irrawaddy.com/news/burma/union-govt-office-minister-unveils-reform-plan-gad.html

NewspapersThe Irrawaddy

23 May 2019

PwC | May 2019

3. Weekly Investment News

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PwC | May 2019

Weekly Key Investment NewsHeadlines

Logistics player Ever Flow River to list on YSX this year

Yangon Region Receives $22 Billion FDI in Six Years

80 Priority Projects Unveiled by Yangon Regional Government

24

Myanmar to call international tender for power delivery

Investment opportunities available in Chin State power, transportation sectors: chief minister

PwC | May 2019 25

Logistics player Ever Flow River to list on YSX this year

Ever Flow River Group Public Company (EFRGroup), which provides logistics services inMyanmar, wants to list on the Yangon StockExchange (YSX) this year, its chair, U Kyaw LwinOo, told The Myanmar Times. If successful, it willbecome the sixth company to list on the boursesince its launch in 2016.EFR Group is listing to gain better access to fundsit will need to develop its logistics assets and tostrengthen its reputation and corporategovernance standards over the longer term, UKyaw Lwin Oo said. “There should also be alogistics company listed on the YSX,” he added.EFR Group is one of the largest logisticcompanies in the country and was established in1996. The company provides services to fiveindustries: trading, agriculture, manufacturing,hotels and tourism.It comprises seven subsidiaries, one affiliate andtwo project companies and employs over 600employees, according to the company.Last year, Hlaing Inland Terminal and LogisticsCompany, a subsidiary of EFR, said it plans toinvest US$46 million in an inland terminal

logistics center in Yangon. The 40-acre project isto comprise a logistics centre, bonded warehouse,inland container depot and a seven-storey officebuilding. The facility is located near Shwe LinBan Industrial Zone in Hlaingtharya township,and will be accessible by barge and truck,according to the company. There are currentlyfive companies listed on the YSX: First MyanmarInvestment Co, Myanmar Thilawa SEZ Holdings,Myanmar Citizens Bank, First Private Bank andTMH Telecom, which listed on the YSX inFebruary last year. TMH Telecom is the first YSXcompany to offer new shares on the stockexchange under an IPO. It sold a total of 12.2million shares, raising K1.6 billion in proceeds.The first four listings on the YSX were by way ofintroduction of existing shares. Two othercompanies, Myanmar Agro Exchange Public Ltd,which built the Danyingone wholesale market,and hydro-engineering company Great Hor Khamhave also been attempting to list on the YSX.Source: Myanmar Timeshttps://www.mmtimes.com/news/logistics-player-ever-flow-river-list-ysx-year.html

NewspapersMyanmar Times

21 May 2019

PwC | May 2019 26

Yangon Region Receives $22 Billion FDI in Six Years

The Yangon Region has received $22 billion inForeign Direct Investment (FDI) over the last sixyears, according to U Phyo Min Thein at theYangon Investment Forum held on May 10.The Chief Minister of Yangon, U Phyo Min Thein,said: “Yangon is a strategic location forinvestment in Myanmar. When you look at theinvestment trends into the country, you will seethat around 50 percent of investment in thecountry goes in Yangon Region.Over the last six years, the Yangon Region hasreceived over K8.5 trillion in investment by localbusinessmen. As of April 2019, $2.6 billion offoreign investment went into the Thilawa SpecialEconomic Zone.Yangon Regional Investment Committee wasformed in July 2017 with authority to approveforeign investments up to a maximum of $5million. The committee has approved 161 foreigninvestments with the total investment amount of$194 million in various sectors such as industry,hotels and tourism, agriculture, aquaculture, andother service areas.It also approved the total of 221 local investments

for a total amount of K60.5 billion.

Source: Myanmar Business Todayhttps://www.mmbiztoday.com/articles/yangon-region-receives-22-billion-fdi-six-years

NewspapersMyanmar Business Today

21 May 2019

PwC | May 2019 27

80 Priority Projects Unveiled by Yangon Regional Government

Yangon’s Regional Government has introduced tothe public its plans for 80 priority projects in theYangon Region. The initiative spreads acrossmultiple sectors, including real estate, industrialzones, roads, ports, and other urbaninfrastructure developments. It is to be financedby the Yangon Project Bank, and hopes to evokemore participation from the private sector inthese infrastructure improvements.U Phyo Min Thein, Chief Minister of YangonRegion, said: “These projects are for thedevelopment of Yangon Region, and will furtherthe entire nation’s interests. We are prepared tostart work using various project funding sources.These include the state budget, multilateral andbilateral development assistance, andpublic/private partnership schemes.”Among the 80 projects announced by the regionalgovernment are $8 billion for the New YangonCity Project, $900 million for the Yangon OuterRing/Inner Ring Road Project, and $1 billion forthe Eco Green City Project. The projects will bejointly overseen by the Yangon RegionalGovernment, Yangon City Development

Committee, Yangon Region Ministry of MunicipalAffairs, Union Ministry of Construction, and theUnion Ministry of Transport and Communication.The field projects will include new citydevelopment, housing redevelopment, industrialzones, ports, aquaculture, agriculture, andeducation. U Phyo Min Thein told us thatalthough Yangon comprises less than one percentof Myanmar’s land mass, it is home to ten percentof the country’s population. It contributes aquarter of the nation’s gross domestic product(GDP), and generates more tax revenue than all ofthe other regions and states. The total taxesYaongon generated in 2016 was over K700 billion,and in 2017 it took in another K400 billion. TheYangon Regional Government is also welcominglocal and foreign investment in theseinfrastructure enhancements, recognizing theneed to make use of expertise and resourcesfound only in the private sector.Source: Myanmar Business Todayhttps://www.mmbiztoday.com/articles/80-priority-projects-unveiled-yangon-regional-government

NewspapersMyanmar Business Today

21 May 2019

PwC | May 2019 28

Myanmar to call international tender for power delivery

Myanmar will hold an international tender for gasto be delivered to the country via floating powerplant to generate the electricity required to meetrising demand in Yangon by summer 2020, asenior official from the Ministry of Energy andElectricity (MOEE) told The Myanmar Times.“We will invite an international tender. We willselect those who can offer the cheapest price. Thisis a short-term emergency plan to generate moreelectricity supply as quickly as possible,” he said.The MOEE plans to buy gas from theinternational market, which will be generated onthe floating unit and channeled via pipeline to thetransmission lines, he said. Distribution will bebased at the jetties nearest to existing powergeneration infrastructure, he said.There are currently eight locations in Myanmarwith the required infrastructure allowing suchships to dock and supply electricity. Thetransmission lines, substations and pipelines arelocated in Kyaukphyu in Rakhine, Pathein inAyeyarwady, Thilawa in Yangon and Mawlamyinein Mon State.The MOEE plans to buy 600 megawatts worth of

power in this manner and prices are expected tobe high. “Based on the budget allocation forpower, we can’t afford to pay too high a price butenough electricity must be provided to meetdemand. There is also the issue of electricity ratesto be resolved,” the official said.The MOEE has set a deadline for the additionalpower to be generated by February next year. Assuch, the tender must take place within onemonth, the official added. Local companies willalso be able to participate in the tender.Last year, a similar arrangement with Turkishcompany Karadeniz Holding fell through.The MOEE has been exploring other emergencyoptions to generate more power, including takinga loan from Thailand and buying power fromChina.

Source: Myanmar Timeshttps://www.mmtimes.com/news/myanmar-call-international-tender-power-delivery.html

NewspapersMyanmar Times

22 May 2019

PwC | May 2019 29

Investment opportunities available in Chin State power, transportation sectors: chief minister

Salai Lian Luai, Chin chief minister, sees bigopportunities for growth and returns for investorswilling to channel funds into the state. Besideshotels and tourism, Chin, he said, requires largeinvestments in infrastructure such as roads andpower grids to draw a higher volume of touristsand connect the state to rest of the country.Owing to its difficult and mountainous terrain,Chin State is one of the poorest states inMyanmar with the least investment. Yet, it is alsothe most scenic. In Chin, the most successfulsectors are hotels and tourism because of thescenery and attractions such as Nat Ma TaungNational Park, Reeds Lake and Kanpatlattownship, which is home to the famed MountVictoria.“Chin State is also a very peaceful state. Chinpeople even take delight in offering visitors thefood they have. They are a very united people andenjoy their traditional dances. Local as well asforeign businesses are invited to invest in anysector they desire in Chin State. As there arecurrently not many investments there yet, it’s agood time for investors to gain the first mover

advantage in Chin,” Salai Lian Luai told TheMyanmar Times during an exclusive interview inMandalay, where he visited this week.Here is an excerpt of our interview:Where are the opportunities and challenges forinvestors in Chin State?The opportunities are in hotels and tourism, fruitand vegetable plantations and livestock farms.There are some barriers in land use - if land isowned by residents or ancestral land, negotiationsbetween the government and private business arenecessary before making investments. When thegovernment grants vacant or fallow land forprivate business we need to make sure residentswon’t oppose. There may be some difficultiesbecause permission from residents is needed also.

Source: Myanmar Timeshttps://www.mmtimes.com/news/investment-opportunities-available-chin-state-power-transportation-sectors-chief-minister.html

NewspapersMyanmar Times

24 May 2019

PwC | May 2019

3. Weekly New Tenders

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PwC | May 2019

Tenders (Myanmar)List

Note: tenders information are collected from http://www.mmtimes.com/, https://tender.yangon.gove.mm, http://consult-myanmar.com/, and http://www.myanmar-opportunities.org/mm/tenders http://www.buildersguide.com.mm/en/ .

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No applicable Tenders announced for the week ending 24 May 2019

PwC | May 2019

Tenders (Multilateral organizations) List

Note: tenders information are collected from https://wbgeconsult2.worldbank.org, www.devex.com, www.adb.org, https://www.ungm.org

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ADB: TA-9621 REG: Green and Innovative Finance Initiative for Scaling Up Southeast Asian Infrastructure - Project Management (Senior Coordinator) (52077-001), Closing Date: 30 May 2019 (Individual)

ADB: TA-9621 REG: Green and Innovative Finance Initiative for Scaling Up Southeast Asian Infrastructure - Project Coordinator (for TA Operations) (52077-001), Closing Date: 30 May 2019 (Individual)

KOICA: Project Management Consultant for the Project for “Establishment of Integrated Agriculture and Irrigation Master Plan (EIAIDMP), Ayeyarwaddy Delta Region”, Closing Date: 3 June 2019

PwC | May 2019

4. MIC Permitted Projects

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PwC | May 2019

MIC Permitted Projects (Meeting 7, 2019)

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No. Name of Company Type of Investment Form of Investment

1 Elerclever (Myanmar) Co., Ltd Education services Joint Venture

2 Kaung Myat Co., LtdGold resort & lodging services on B.O.T basis

Wholly Myanmar Owned

Source: DICA

PwC | May 2019

5. Upcoming Events

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PwC | May 2019

Upcoming Events (May 2019) List

Date Location Name of Event Sector Price Focus Points

28-30 May 2019

Mandalay

Mandalay International Livestock and Agriculture Show

Livestock and Agriculture

Free

“Mandalay International Livestock andAgriculture Show (MILAS) successfully heldfor the past 2 years since 2016. The 1stedition in 2016 showcased over 48 brandsand companies from 14 countries with total60 booths. We had 1300 + local and foreignvisitors in 2016. The 2nd edition in 2017showcased over 60 brands and companiesfrom 15 countries with total 87 booths.”

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Note: Events information are collected from https://www.go-myanmar.com/events-and-conferences and https://10times.com/myanmar .

PwC | May 2019

Upcoming Events (June 2019) List

Date Location Name of Event Sector Price Focus Points

11-12 June 2019

YangonEmerging Asia Banking & Fintech Summit

Banking and Fintech

TBC

“The modernisation of banks is taking root,with many financial institutions rising to thechallenge of adopting international bestpractices and investing in systems that willtransform the way they operate.This is theonly exclusive Summit dedicated to thebanking needs of Asia’s emerging markets.The Summit will dive into issues that keeptop management of banks and financialinstitutions up at night! Probe the challengesand, more importantly, the best practices tosuccessfully operate in markets such asMyanmar, Cambodia, Vietnam, Laos etc.Hear from innovative industry experts fromcountries such as Thailand, Singapore andJapan.”

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Note: Events information are collected from https://www.go-myanmar.com/events-and-conferences and https://10times.com/myanmar .

© 2019 PricewaterhouseCoopers Myanmar Co Ltd. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers Myanmar Co Ltd, which is part of the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.

www.pwc.com/mm

PwC Myanmar Weekly Business Intelligence Publication

For further information please contact:

Jovi SeetSenior Executive Directorjovi.seet@sg.pwc.com

Brandon LyeDirectorbrandon.ys.lye@sg.pwc.com

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