During the eight years since it began allowing car sales centers, frequently referred to as “car dealerships”, the Ministry of Commerce has terminated a total of 106 of these facilities. Why? For not following simple rules like complying with legal requirements, failing to register imported cars, and for failing to pay taxes. U Khin Maung Lwin, Deputy Permanent Secretary of the Ministry of Commerce, told Myanmar Business Today: “There are requirements for opening a car sales center. You must import and register the car. You have to pay tax. You have to abide by the rules.”
When opening a car dealership, a person has to open a bank account and deposit K150 million into it. If the sales center fails to pay the required taxes, the ministry freezes those funds until the owner settles the debt.
“If these centers fail to follow the rules, we will terminate their license, and seize the deposit the owner placed for the center,” U Khin Maung Lwin explains. “The K150 million deposits are placed into a bank account; these are opened under the name of the person who will open the center, not placed on deposit with our department. However, if they do not follow the rules, we freeze the bank account until they pay the taxes.”
This is part of an ongoing story. In April 2018, the Supervisory Committee for motor vehicle importers had publicly announced the names of 59 dealerships that failed to follow registration regulations and pay taxes, and strongly encouraged them to make restitution within 30 days.
In addition to the total of 106 sales centers that have been closed by the Ministry of Commerce for legal and tax violations, another 67 were closed due to factors like low consumer demand, high land rental costs, and the resulting financial losses from these factors. As of this writing, a total of 121 centers are still in operation across the country.