Bawdwin Mine and the MIC

Below is an extract from a Berlin-based OpenOil report, written by a company which has advised the Myanmar government on mine and oil contracts:

The cost of a tax holiday The average rate of production share and royalty combined in Myanmar seem to be higher than comparison countries, as reported by Natural Resource Governance Institute18. On the other hand, MYL statements envisage a holiday on corporate income tax of seven years. The model shows that a tax holiday for such a period would cost the government of Myanmar $163 million in foregone corporate income tax. At the same time, analysis suggests the company would achieve an Internal Rate of Return (IRR) of 31% if no tax holiday was granted – above a 20% “hurdle rate” representing some minimum rate of return required to justify the risk of a relatively untried investment environment. The chart shows income losses to the state of any duration of corporate income tax holiday. The tax holiday decision is in the hands of the Myanmar Investment Commission (MIC).

https://openoil.net/wp/wp-content/uploads/2016/12/oo_my_bawdwin_report_200114_0812_jw.pdf

The level of concern within the Myanmar population regarding the enormous tax free holiday MYL is proposing is seen in the article below:

https://www.myanmar-now.org/en/news...yanmar-163m-while-companies-reap-huge-profits

So I say again, as per the guidebook I posted the other week - the MIC is not a foregone conclusion: