The local garment factories in Myanmar plan to export their own branded garments, according to Myanmar Garment Entrepreneurs Association (MGEA). At present, these garment factories are exporting their products with the cutting, making and packaging (CMP) system.
“We are not able to export our products with the Free-On-Board (FOB) system. Presently, we are trying to get tax exemption for the FOB system. We are discussing this with the US Government to get some tax relief on the products exported with the CMP system because the garment industry was not included in the reinstatement of the Generalized Scheme of Preferences (GSP),” averred U Myint Soe, Chairman, MGEA.
Also Read – CMP garment exports make US $ 1.8 billion for Myanmar in FY ’17
Cotton wear, in the US, is taxed 10 to 12 per cent and nylon wear is taxed 37 per cent. The Government collects 6 to 15 per cent tax on FOB system products. The Association, therefore, has submitted a proposal to Ministry of Commerce and Ministry of Planning and Finance to get tax exemption for products exported with FOB system.
It is worth noting that the garment industry earns around 10 per cent of a garment’s value. Currently, 33 per cent of local garment production is exported to Japan, 25 per cent to South Korea, 2.4 per cent to the US and 2.4 per cent to China.
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