Myanmar is making progress in developing legal avenues to export gold. The Ministry of Commerce (MOC) yesterday said it would remove the metal from its restricted exports list and open a service centre near the Peoples’ Square in Yangon to handle the legal trading of gold. An official notification has yet to be issued.
Legal gold exports could draw more foreign currency into the country and help stabilise the exchange rate. It will also deter illegal trade at the borders, U Kyaw Win, chair of Myanmar Gold Entrepreneurs Association, told The Myanmar Times.
The development comes after two years of discussions on ways to legalise gold exports between the Myanmar Gold Entrepreneurs Association and the MOC.
Currently, the export of gold is restricted by the MOC. Nevertheless, large amounts of the precious metal have been smuggled out of the country to Thailand and China via the Myanmar border, resulting in lost tax revenues for the country.
As such, gold will be removed from the list of restricted commodities and exports of the previous metal will now be allowed, said U Khin Maung Lwin, assistant secretary of the MOC.
Among the tangible benefits of legalising the export of gold is the collection of tax revenues by the State, as the government will be able to collect official statistics on the amount of gold that leaves the country, said U Kyaw Win.
“Currently, the State doesn’t receive any taxes even though gold, which is a Myanmar resource, is leaving the country daily via illegal avenues,” he said.
He added that it will also draw dollars into the country, which will help to stabilise the exchange rate, now at a high of K1,445 per dollar, based on the Central Bank’s reference rate. One of the reasons the kyat is depreciating is a shortage of dollars in Myanmar.
Now, all exporters and importers of gold are required to trade via legal avenues set up by the government. The Myanmar Gold Entrepreneurs Association will cooperate with the government and provide all the necessary assistance needed to enforce legal trade, said U Kyaw Win.
Gold, which is mined in Myanmar, and gold jewelry and accessories were first legally cleared for import and export in January. However, although demand from India, China, Thailand and even Japan is on the rise, the country lacked avenues to trade, said U Kyaw Win, chair of association.
In Myanmar, where gold is mainly bought and sold in its physical form at wholesale markets such as those located Shwe Bon Thar Street, Yangon.
In April, he Myanmar Gold Entrepreneurs Association said it was completing a draft blueprint for the creation of a long-touted gold trading exchange which would focus on drawing local traders and building up domestic volumes in the initial phase, following which the exchange will be developed into an international gold trading market.
U Kyaw Win warned though, that while demand from foreign merchants is robust, local merchants have yet to establish sufficient gold inventories enabling sustainable exports. Meanwhile, experts are also needed to help grade the gold, he said.
Source: MYANMAR TIMES
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