The Myanmar Garment Entrepreneurs Association (MGEA) is working for MFN (most-favored nation) status so that the CMP (cutting, making and packaging) clothing industry can receive tax reliefs

The Myanmar Garment Entrepreneurs Association says it is working for MFN (most-favoured nation) status so that the CMP (cutting, making and packaging) clothing industry can receive tax reliefs. 

Myint Soe, chair of the association, said: “I have submitted a plan to ensure the country gets MFN status when CMP products are exported to the US. It is a state-level matter. The tax levied on the CMP products exported to the US ranges from nothing to 5 per cent. Under the MFN system, the taxation rate is higher than 5 per cent.”

The US restored the generalised system of preference rights to Myanmar after lifting economic sanctions last year. But clothing is not included on the list of products which can enjoy the rights reinstated by the US.  

The US will collect a 10-12 per cent tax on exports of cotton clothing and a 37-per-cent tax on nylon garments. High taxation rates serve as a deterrent to garment exports. 

Khaing Khaing Nwe, secretary of the association, said: “CMP export earnings are expected to reach up to US$2.2 billion this year as it receives more orders from the EU and Japan.”

According to the commerce ministry, the export earnings from the CMP exceeded US$1.64 billion between April 2016 and the end of February, up nearly US$1 billion from the same period the previous year. 

Thirty-three per cent of CMP exports go to Japan, 25 per cent to the EU, especially Germany, 25 per cent to South Korea, 2.4 per cent to the US and about 2.4 per cent to China. 

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