Myanmar businesses holding stockpiles of illegally imported alcohol will be able to legalise their goods by paying tax. The move has raised public health risks and industry concerns over possible counterfeit products.
By obtaining a government A1 tax stamp before an August 28 deadline, businesses can legalise stocks of foreign alcohol imported illegally before restrictions were lifted in May, the Internal Revenue Department (IRD) said earlier this month.
The businesses are obliged to pay taxes and duties on the goods amounting to about 60 percent of their retail value.
The decision, which appears to amount to an amnesty, is driven by the need to raise tax revenues, the Myanmar Times understands. The government did not state an estimate publicly. The IRD did not respond to requests for comment.
The Ministry of Commerce lifted an almost total ban on foreign alcohol imports in May. The liberalisation policy was shaped by an inter-ministerial supervisory committee for beer, wine, and spirits production, distribution and import, led by the ministry. Separately, the General Administration Department is also drafting an excise law to regulate imports of foreign liquors.
The reforms are intended to attract more direct foreign investment in the beverage industry and undermine a thriving black market, mostly in foreign beer and whisky.
A study commissioned by EuroCham Myanmar estimated that illicit trade in beer and whiskey amounted to US$200 million in 2017 and US$75 million in 2018. Customs department data suggests that 1.3 million litres of distilled spirits valued at almost US$8 million were legally imported in 2017-18.
Asked for comment, the World Health Organisation said it was important to ensure the quality of imported alcohol through established procedures and monitoring, including official licensing for distribution.
It says it has been advocating how to institutionalise “multi-sectoral governance mechanism to regulate and take actions on harmful use of alcohol”, which “includes not only the question of excise taxes and pricing policies for alcohol, but also quality control and checking mechanism for alcohol prior to distribution.”
EuroCham Myanmar, which has lobbied the IRD to allow liberalisation as a tool to stop smuggling, says illegally imported wine and spirits pose a risk to public health and undermine legitimate brands.
The business association, whose members include beverage multinationals, is urging the government to check retail and wholesale outlets to ensure that counterfeit products are not circulated as part of converted illegal stock.
“We are concerned about the risk of unintended consequences from the legitimisation of illegal stock on consumer safety and on brand reputation as such products are beyond producers’ quality control systems and counterfeit or tampered products can pose a threat to consumer safety and public health,” a spokesperson said
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