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Hệ thống tài chính của Myanmar

thoidaianhhung

Administrator
The Union of Myanmar
Ministry of Finance and Revenue
The Financial Sector Development in Myanmar​

Introduction


The financial system in Myanmar has been restructured since 1989-90 at the dawn of the market oriented economic system of the nation. In order to establish a sound and efficient financial system, the financial sector has been liberalised, granting private sector participation in the financial activities. Necessary amendments of the existing laws were made and new laws were promulgated in banking, customs, taxation and insurance areas. Simultaneously, the government lays the foundations for a capital market through the issue of treasury bonds and organizing a joint venture firm, the Myanmar Securities Exchange Centre.

Ministry of Finance and Revenue

At the apex of the financial system is the Ministry of Finance and Revenue (MFR). The highest power to control and manage all the affairs pertaining to the nation's fiscal and monetary policies as well as the mint and security printing operations is vested in the MFR. The MFR is responsible for overall administration of the government's fiscal and monetary policies. MFR is composed of state owned financial institutions and organizations of government finance.

The State Owned Financial Institutions

1. Central Bank of Myanmar (CBM)
2. Myanma Economic Bank (MEB)
3. Myanma Foreign Trade Bank (MFTB)
4. Myanma Investment and Commercial Bank (MICB)
5. Myanma Agricultural Development Bank (MADB)
- (transferred from the Ministry of Finance and Revenue to the

Ministry of Agriculture & Irrigation in 1996

to more emphasize on agriculture development)
6. Myanma Small Loans Enterprise (MSLE)
7. Myanma Insurance (MI)

Government Finance Organizations

1. Budget Department
2. Customs Department
3. Internal Revenue Department
4. Pension Department
5. Revenue Appellate Tribunal

Banking System

Banking system is at the core of the financial system and is the fulcrum of monetary policy. The institutional framework of the banking institutions, along with the Central Bank of Myanmar, constitutes the monetary system in Myanmar. The basic principle of the banks is to cause the effective mobilisation and allocation of fund resources in the economy in order to help promote economic growth, safeguard stability and raise the living standard of the people.

The Central Bank of Myanmar

As the monetary authority, the Central Bank of Myanmar (CBM) formulates and implements monetary policy, with the aim to preserve the value of the Myanmar currency, to promote efficient payments mechanisms and the liquidity, solvency and proper functioning of a soundly based financial system and to foster monetary, credit and financial conditions conducive to the orderly, balanced and sustained economic development.

Monetary policy: The CBM currently keeps a prudential policy so as to maintain the macro economic stability in the economy and to promote domestic savings. At present, the CBM mainly uses such monetary policy instruments as reserve requirements and interest rate, and to a certain extent, open market operation. The CBM has initiated the issuance of 3 years and 5 years treasury bonds bearing interest of 13.5 per cent and 14 per cent per annum respectively, as the initial step for establishing capital market in Myanmar. With a view to initiating the securities market, the Myanma Economic Bank has formed a joint venture security firm - the Myanmar Securities Exchange Centre Company Ltd. with Daiwa Institute of Research Ltd., Japan.

Banking policy: The CBM takes a banking sector development strategy with three phases as follows:

Phase 1: - promoting the institutional development;
- promoting the skills and efficiency among the domestic banks with a medium term, while foreign
banks are allowed to open their representative offices in Myanmar; initially foreign banks are
allowed to open representative offices which may work only as liaison offices of their head quarters;

Phase 2: - permitting selected domestic banks to run joint venture bank with foreign banks;

Phase 3: - permitting foreign banks to open bank branches and operate banking activities in Myanmar.
(The CBM also aims to improve payments system development, transforming the banking system
from a manual system into a computerised one, and thus computerisation, installing ATM machines
and using credit cards have been started in the system)
20 domestic private banks are now in operation and 46 foreign banks have been permitted to open their representative offices. Until now, 4 Memorandum of Understandings have been signed between the local banks and foreign banks to run joint venture banks.
________________________________________
Joint Venture Bank Guidelines by the Ministry of Finance and Revenue
1. Foreign bank must have rep. office in Yangon
2. JV Bank will be a separate legal entity
3. Minimum foreign capital in US $ 10.0 mn
4. Minimum foreign equity of 35%
5. Equity participation should be fair and reasonable
6. Local bank's equity may be either in US $ or in kind
7. To conduct only foreign banking services
8. Approval by the Myanmar Investment Commission
________________________________________
The Central Bank of Myanmar
Legal Basis
1. The Union of Burma Bank Act 1952
2. The Bank Law 1975
3. The Central Bank of Myanmar Law 1990
Main Responsibilities
- acting as the sole issuer of domestic currency, either bank notes or coins;
- acting as a banker to the Government;
- acting as advisor to the Government in respect of such economic matters as the Government may require including economic development policies and plans, and the State budget;
- acting as advisor and agent of the Government for the issuance of governmental securities;
- formulating and implementing monetary policy;
- inspecting, supervising and regulating the financial system so as to ensure its sound and safe operation and development;
- acting as a banker for the financial institutions and to foreign governments and international agencies;
- implementing the exchange rate policy of the State and as agent of the Government, controlling foreign exchange transactions;
- managing the international reserves of the State and carrying out necessary measures to ensure a stable and viable balance of payments position;
- performing the transactions resulting from the participation of the State in intergovernmental organizations in the banking, credit and monetary sphere and undertaking all the responsibilities in the name of the Government dealing with the aforesaid organizations on behalf of the Government.
________________________________________
Types of Financial Institutions
There are four types of financial institutions in Myanmar. (Article 5 of the Financial Institutions of Myanmar Law 1990)

1. Commercial Bank -
Commercial banks provide general banking services collecting demand deposits with chequing privileges collecting demand deposits with terms not more than one year, and providing short term credit operations;

2. Investment Bank or Development Bank -
Such a bank accepts time deposits with terms exceeding one year and gives loans for working capitals;

3. Finance Company -
Finance companies provide funds for the purchase of goods or services with the funding other than deposits from the public;

4. Credit Societies -
Credit societies engage in financing to individual members of the societies, for consumption, production or commerce, using funds collected in members' accounts.

Operations of Banking Institutions

(Article 25, the Financial Institutions of Myanmar Law, 1990)
- borrowing or raising of money;
- lending or advancing of money either upon or without security;
- drawing, making, accepting, discounting, buying, selling, collecting and dealing in bills of exchange, promissory notes, draft, bills of lading, railway receipts, debentures, and other documents of title and debt securities, whether negotiable or not;
- granting and issuing of letters of credit and travellers cheques;
- buying, selling and dealing in bullion and species;
- buying and selling of foreign exchange including foreign bank notes;
- purchasing and selling of bonds or other forms of securities on behalf of customers;
- receiving securities or valuables for safe custody;
- collecting and transmitting money and securities;
- acting as agents of local governmental authorities of the central bank;
- providing guarantees for extensions of credit and performance of business, etc;
- financing or assisting in financing any business undertaking, either existing or new, through syndicates or otherwise;
- undertaking trust business and the administration of estates as executor or trustee;
- acquiring an equity interest in other institution in accordance with the Financial Institutions of Myanmar Law;
- undertaking other financial services activities.

Key Provisions in Banking Regulations

• Establishing a bank: A bank or a financial institution, whether state owned or jointly owned by State and private, or private owned, can be established and operated with the prior approval of the Central Bank of Myanmar. (As per Article 12 of the Financial Institutions of Myanmar Law)

Licensing Procedure

- A financial institution wishing to operate in Myanmar shall firstly be established as limited liability company in accordance with the Myanmar Companies Act as well as with the Special Company Act, 1950; (Article 3 of the Financial Institutions of Myanmar Law)

- Application for the license to operate is to be put up together with a feasibility study to the Central Bank of Myanmar; (Article 14 (a) of the Financial Institutions of Myanmar Law)

- Minimum Paid-up Capital Requirements -
(a) Commercial Bank - Kyat 30 million
(about US$ 5 million)
(b) Investment or Development Bank - Kyat 60 million
(about US$ 10 million)
(c) Finance Companies - Kyat 8 million
(about US$ 1.3 million)
(d) Credit Society - Kyat 2 million
(about US$ 0.3 million)
(Article 8 of the Rules Relating to Financial Institutions of Myanmar Law)
- Financial institutions shall be administered by the respective Board of Directors, and financial institutions shall be the memorandum of association and articles of association; (Article 21 & 22 of the Financial Institutions of Myanmar Law)


• Prudential Provisions

- Minimum Reserve Requirements:
i. 10 per cent of demand deposit and 5 per cent of time deposit are required to be maintained by each bank as the minimum reserve requirement;

ii. 75 per cent of the required reserve is to be deposited with the CBM, and 25 per cent of the required reserve may be maintained in the form of cash; (Article 58 of the CBM Law, Regulations 3 & 4 of Regulations for Financial Institutions)

iii. Required reserves for a bank to maintain with the CBM must not exceed 35 per cent of the total liabilities of the bank; however, in the event of serious inflationary pressure, the CBM may increase the 35 per cent ceiling of required reserves.

- Liquidity Control: Banks are required to maintain the level of their liquid assets against their eligible liabilities at not less than 20 per cent. (Article 58, 59 of the Central Bank of Myanmar Law, Central Bank's Instruction No.4)

- Capital Adequacy Ratio: The relation between the risk-weighted assets and the capital and reserves of a financial institution shall not exceed ten times. (Article 31 of the Financial Institutions of Myanmar Law ) (Basle Accord Capital Adequacy Ratio is 8 per cent)

- Legal Lending Limit: Financial institutions shall not lend more than 20 per cent of their capital plus reserves to a single individual, an enterprise or an economic group. (Article 32 of the Financial Institutions of Myanmar Law)

- Credit Control:

- In carrying out credit operation, financial institutions shall comply with the principles of risk avoidance, diversification and liquidity, as well as with directives issued by the Central Bank; and they shall acquire and keep the legal documents for the respective credit operation. (Article 28, 29 of the Financial Institutions of Myanmar Law)

- The banks are required to build up and maintain a general provision account amounting to at least 2 per cent of total outstanding loans/ advances at the end of the year, and they are also required to maintain specific provision for doubtful and/ or bad loans on case by case basis. (Article 11(d) of the Financial Institutions of Myanmar Law, Central Bank's Instruction No.6)

- Interest Rate: Minimum interest rates payable on savings deposit, saving certificate and time deposit shall not be less than 3 per cent below the Central Bank rate; maximum interest rate chargeable on loans and overdrafts shall not be more than 6 per cent above the Central Bank rate. (Article 61, the Central Bank of Myanmar Law, Regulation 12, 13 of Regulations for Financial Institutions). A copy of the interest rate structure in Myanmar is attached. A-1.

Bank Supervision

The Central Bank of Myanmar is responsible for licensing, inspecting, supervising and regulating financial institutions and may give directions as may be necessary to ensure the solvency and soundness of the financial institutions.

Reports: Banks are required to submit the following reports to the CBM:
a. Weekly i. Weekly reserve position of the bank
ii. Liquidity ratio
b. Monthly i. Monthly balance sheet of the bank
ii. Income and Expenditure Statement
iii. Capital Adequacy Ratio
c. Quarterly - no- performing loan statement
d. Annually - Annual Report

State Owned Banks

Myanmar Economic Bank (MEB) which has the largest commercial banking network in Myanmar maintains the deposit base (over K 70 bn) of any financial institution and is heavily weighted towards domestic savings. the bank's loan portfolio is directed to 70% private sector, 10% cooperative and 20% government employee borrowers. Myanma Economic Bank has a total number of 314 branches throughout the country. Its paid up capital amounts to K 220 million.

The Myanma Foreign Trade Bank concentrates upon international banking business, rendering banking services for export, import, guarantee issuing, remittances, credit card services, sale and purchase of foreign currencies and traveller's cheques, collection of foreign currency cheques and drafts. Myanma Foreign Trade Bank maintains correspondent relations with 30 foreign banks from all parts of the world. Offering current accounts and fixed deposit accounts, Myanmar Foreign Trade Bank has 63003 number of foreign exchange accounts. Myanma Foreign Trade Bank gives interest on fixed deposit accounts at the annual interest rate of 2.5 per cent.

The Myanma Investment and Commercial Bank (MICB) specialises in corporate and investment banking to local customers and foreign companies. The bank accepts deposits in both Kyat and foreign exchange, and undertakes foreign trade transactions. In 1995, MICB had an estimated Ks 1.3 bn and US$ 113.5 mn in deposits supporting over Ks 2.8 bn in loans.

Private Banks

Besides the typical commercial banking business, the private banks have introduced higher margin businesses such as longer term deposit and lending instruments, hire purchase facilities, current accounts, credit and ATM cards, and mortgage loan facilities.
Private Banks
1. First Private Bank
2. Myanmar Citizens Bank
3. Myawaddy Bank
4. Co-operative Bank
5. Asia Yangon Bank
6. Asia Wealth Bank
7. Kambawza Bank
8. Innwa Bank
9. Yadanabon Bank
10. Yangon City Bank
11. Tun Foundation Bank
12. Universal Bank
13. Yoma Bank
14. Myanmar Oriental Bank
15. Myanmar Mayflower Bank
16. Myanmar Livestock and Fisheries Development Bank
17. Myanmar Industrial Development Bank
18. Sibin Tharyar Yay Bank
19. Co-operative Farmers Bank
20. Co-operative Promoters Bank

The Role of Foreign Banks

There are currently over 46 foreign banks which have received permission to open representative offices in Myanmar. These offices cannot conduct any commercial banking business yet. They often monitor Myanmar based projects to whom their offshore parent banks have extended financing. Offshore loans for Myanmar projects usually require offshore guarantees although there is sufficient legal standing to permit the use of Myanmar assets as collateral.

Myanma Insurance

The Myanma Insurance Law was enacted in 1993. According to Myanma Insurance Law, eight classes of insurance namely; Life Insurance, Marine Insurance, Aviation Insurance, Fire Insurance, Engineering Insurance, Third Party Liability Insurance & Comprehensive Motor Insurance and Oil & Gas Insurance are allowed to underwrite. The Myanma Insurance (MI) offers coverage for companies and individuals for all types of insurance in both kyats and foreign exchange (except life and health, for which only kyat-based coverage is available). Steps are being undertaken to liberalize the insurance sector to allow private sector participation in insurance business. Consequently, the Insurance Business Law was enacted in 1996 and its related Rules was issued in 1997. For the time being, foreign firms are permitted to open three representative offices. Myanma Insurance has signed two MoUs to form joint venture company. In the near future, Myanmar private firms will be allowed to under write kyat-based polices and foreign insurance companies to issue policies, especially for capital assets. Reinsurance, risk assessment and financial banking are carried out offshore with MI retaining an average 10-15% of the risk.
 
Government Finance Organizations​

The Budget department, the Internal Revenue department and the customs department are crucial on the fiscal front. Since 1989, a new financial management system, namely, State Fund Account has been introduced to further focus on financial discipline among the government organizations. The new system gives State Economic Enterprises more financial autonomy.

The State financial system and budgeting system place emphasis on effective mobilization of revenue and appropriate allocation of financial resources. State budgets are drawn on the basis of State Administrative Organizations, State Economic Enterprises and Cantonment Municipalities.

The fiscal deficit, largely due to huge fiscal spending on infrastructure development, now has been targeted to reduce from 7 per cent of GDP to about 5 per cent of GDP. Contrary to the past, the financing of fiscal deficit has not relied entirely on borrowing from the central bank. but also on the issuance of government bonds in the market. Public sector development is carried out largely by mobilization of own resources without much external aids and borrowing.

Customs Department


To enhance trade facilitation through simplification of Customs procedures, without adversely effecting customs objectives to monitor the legitimate traffic of goods and to maintain power collection of revenue, the Customs department examines and monitors importation and exportation of goods, examines passengers and their baggage entering or leaving Myanmar; assesses and levies duties enforces and provisions of the Sea Customs Act, Land Customs Act, Tariff Act and other related Acts and combats commercial fraud. Customs duties collected by the Customs department account for around 20 per cent of total tax revenue.

The Customs department has seven divisions, namely:
(1) Import & Export division
(2) Preventive division
(3) Outstation division
(4) Investigation division
(5) Administration division
(6) Finance and Inspection division
(7) Supply and Transport division

The Director General is the chief executive officer of the Customs department.

Customs Clearance Procedures for Export & Import

The Tariff Law was enacted on March 12, 1992 with a view to assisting the market economic system in order to facilitate external trade. In accordance with the Law, a notification was issued to regulate the classification of imported goods and assessment of duties for modernisation and standardisation, in line with international practice, the Harmonised Commodity Description and Coding System ( H.S) was introduced in April 1992.

Current Deposit Account

The exporters, importers and Joint Venture cooperation can open current deposit accounts in the Customs department. The custom duties and other taxes levied on their imports or export can be deducted from these accounts.

Duty Exemption

In the interest of the State, the Minister for Finance and Revenue may, by notification exempt partially or wholly from levy of customs duties in respect of any of the following cases:

(a) Nature and type of goods exported from Myanmar or imported into Myanmar

(b) Nature and type of goods exported from Myanmar or imported into Myanmar by any government department or any organization.

Valuation System

The basic principle of the present national valuation system is that the real value is taken to be the normal price or import value of goods at the time and place of importation. It presupposes that the sale has taken place in the open market between independent buyer and seller.

Being one of the original signatories of both GATT and WTO, Myanmar shall inevitably have to apply the Customs Valuation method prescribed in GATT article VII in due course and has taken measure to do so. The Myanmar Customs has made use of the Special and Preferential Treatment offered to developing countries in GATT Article VII of 1994, to exercise delay application of the GATT code until the year 2000.

Customs Tariff

The maximum tariff rate is 40% and the minimum is 0%. Customs tariff rates on imports of machinery, spare parts and inputs, generally range from 0.5% to 3%. Export duty is levied only on five categories. The rates applicable are K.10 per metric ton for rice and flour, 10 per cent advalorem for bamboo and 5 per cent advalorem for rice bran, rice dust, raw hides and skins, oil cakes, pulses and cereals, other than rice and rice products.

International Role of Myanmar Customs


Myanmar is one of the original members of both GATT (General Agreement on Tariff and Trade) and WTO (World Trade Organization).
The Myanmar Customs became the 109th member of WCO (Myanmar Customs organization) on March 25, 1991 and also became a contracting party to the International Convention on the Harmonized Commodities Description and Coding System on November 21, 1994. this convention has entered into force in Myamar since January 1, 1995.

As member of the World Trade Organization as well as the World Customs Organization, the Myanmar Customs has made every effort in complying with international trade regulations and in applying and enforcing Customs Laws while facilitating trade. The Myanmar Customs has been actively participating in international meetings and seminars. Since Myanmar has become a member of the ASEAN on July 23, 1997, Myanmar has entered into the ASEAN Agreement on Customs. Myanmar has been participating in customs cooperation programmes in ASEAN especially to promote closer links between the ASEAN customs fraternity, to enhance regional cooperation, efficiency and uniformity in customs practices in ASEAN, and to enhance the capabilities of ASEAN customs administrations. Aiming at establishing the ASEAN Free trade Area, Myanmar has joined other ASEAN members in implementing the Common Effective Preferential Tariff Scheme (CEPT). In doing so, steps are being taken to gradually reduce tariffs to the range between 0% and 5% within ten years time. Myanmar Customs Valuation System will be in line with the GATT Valuation System in the future. Regarding the Classification System, Myanmar will commence the ASEAN Harmonized Tariff Nomenclature in the year 2000. However, most of the Myanmar Customs Procedures are in consonant with the Standard Practice and
Recommended Practice of Kyoto Convention.

Computerization

The Myanmar Customs Administration recognizes the value of information technology in facilitating customs procedures to promote trade efficiency and has already streamlined its organizational structure and management for computerization. The first automated data processing system was introduced on April 1, 1995 by installing a Local Area Network (LAN) at Yangon Headquarters. As a preliminary stage, this LAN network is currently used for compilation of Import/Export Trade Statistics and duty calculations.

The main objective is to establish a Customs Database at the final stage for Data sharing and communication with other Customs related trade communities.

At present, information data collected from Customs Declaration Forms are fed through input terminals placed at Customs Headquarters and transferred into the main frame unit installed at Central Statistical Organization for compilation of Balance of Foreign Trade Statistics.
The Internal Revenue Department

The Internal Revenue Department administers five kinds of taxes, namely, commercial tax, income tax, profit tax, lottery tax and stamp duties, which account for around 75 per cent of total tax revenue.

Following the introduction of the market-oriented economic system in late 1988, various tax reform measures have been taken, including broadening the tax base, adjusting tax rates, strengthening tax administration, collection, and enforcement and streamlining procedures in the collection of taxes.

The Commercial Tax Law was promulgated in March 1990 replacing the Commodities and Services Tax Law, to broaden the tax base making the private sector production and service activities inclusive.

Commercial tax is levied according to the type of goods. The Commercial Tax Law will be replaced by a more advanced and sophisticated value added tax (VAT) in the future.

The income tax includes mainly corporate tax, individual tax, capital gains tax and withholding tax. A flat corporate tax rate of 30 per cent is charged on the income of companies formed in Myanmar under the Myanmar Companies Act or any other existing Myanmar Law, enterprises operating under the Union of Myanmar Foreign Investment Law, and foreign organizations engaged under special permission in a State-sponsored project, enterprise or any undertaking. A branch of a foreign company in Myanmar is liable to pay income tax at the rate of 35 per cent on the total income or at a progressive rate of 5 per cent to 40 per cent whichever is greater.

A foreign employee of any enterprise operating under the Foreign Investment Law, for income tax purposes, could be treated as a resident citizen. As a consequence, for resident foreigners, progressive individual tax rates starting from 3 per cent to a maximum ceiling of 30 per cent is applicable. Non-resident foreigners deriving income within Myanmar are liable to pay individual income tax at a flat rate of 35 per cent on the total income.

The capital gains tax rate is a flat 10 per cent on the profit derived by residents form the sale of immovable property, fixed assets and motor vehicles if the sale price exceeds Kyat 50,000. But for non-resident foreigners, the tax rate is 40 per cent on capital gains. Payment on income such as interests, royalties and on contracts are subject ot withholding tax at various rates ranging from 2.5 per cent ot 20 per cent.

There are exemptions form income tax. Dividends received are exempted from income tax, and such income is not treated as part of the total income of the recipient. There are also provisions for the exemption of income tax, particularly as incentives for newly established enterprises.

The Income Tax Law is supplemented by the income Tax Rules, the Income Tax Regulations, the State Budget Law and Notifications issued from time to time.

Myanmar has signed bilateral tax treaty with the United Kingdom over (40) years ago. The Agreement on Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income was signed by the Government of the Union of Myanmar and the Government of Malaysia on March 9, 1998. We are also in the process of negotiating an agreement for the avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income with the Singaporean authorities.
 
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