Myanmar Interest Rates Under Pressure

• Proeksa Meas
• 15 January 2018
• International News
• 1893 Views

The government of Myanmar is under pressure from the real estate industry to reduce the high capital gains tax and interest rates on borrowing to boost investment in the construction and property sectors.

The Myanmar Construction Entrepreneur Association (MCEA) is leading calls for capital gains tax to be reduced from 30 percent to 5 per cent. Property developers are also leading calls for borrowing rates, currently set at 13 percent, to be lowered to 9 percent and extend mortgage terms to 20 years, up from 15 years.

“The high rates have caused construction entrepreneurs to suffer a lot,” U Shein Win, vice-chair of the MCEA told the Myanmar Times. “Sales and purchases of property have become very slow. Operating cash flows have turned negative. If the present situation continues, the construction sector may collapse and come to a standstill.”

“I guarantee more buying and selling of property is likely and the government may well end up with more tax revenues from both sectors,” he added.