The Ministry of Planning, Finance, and Industry (MOPFI) will give tax breaks and financial assistance to businesses in industries hit by the global COVID-19 pandemic. These include suspending the 2 percent Advance Income Tax (AIT) on exported goods and providing soft loans for businesses in the hardest-hit sectors. “The government will reduce tax and interest rates so that people will not suffer, to prevent unemployment, to enable factories to continue operating and to minimize the impact on the economy of the country,” said State Counselor Aung San Suu Kyi in a televised speech.

The suspension of the 2 percent advance tax on exports will remain in effect until September, the end of the current fiscal year. The measure aims to stimulate Myanmar’s ailing export markets, which have been affected by border closings and restricted trade routes within its land neighbors. Although exports of rice and other crops to China has picked up in recent weeks, seafood trade is down, with unsold fish, shellfish, shrimp and other products spoiling in warehouses. Businesses in industries have also been allowed to postpone their monthly commercial tax payments until September 30. “Although 2% AIT can be offset against the annual Corporate Income Tax (“CIT”) liability, this 2% AIT cut will significantly help exporters who earn low-profit margins, as they will benefit from a better cash-flow situation,” wrote business law firm VDB Loi in a newsletter.

The MOPFI has also announced a “COVID-19 Fund” to supply capital in the form of soft loans to pandemic-affected industries. Eligible businesses include all small and medium enterprises, “cut, make and pack” enterprises that prepare goods for export, and businesses in the hospitality and tourism sector. These loans will have a term of one year and interest rate of 1 percent.