The Irrawaddy Magazine |
- Tax Scheme Slows Rangoon’s High-Value Property Market
- Business Roundup (November 2, 2013)
- For Burma Artist, Painting is Poetry
| Tax Scheme Slows Rangoon’s High-Value Property Market Posted: 01 Nov 2013 09:05 PM PDT  Rangoon residents watch construction underway in downtown Rangoon, where development projects set for completion next year could fuel a property boom. (Photo: Steve Tickner / The Irrawaddy) RANGOON — One month after Rangoon's government introduced a new tax measure to cool an overheated property market, realtors say sales of high-end properties have slowed. Land values in the commercial capital have risen dramatically since a lower 15 percent tax rate on sales was applied in 2007. Economic and political reforms since a nominally civilian government took power in 2011 have further boosted prices as the city awaits an investment boom. A tax rise last year—to 37 percent—failed to curb rising prices, since buyers and sellers could easily declare low values for land being sold, and avoid paying tax on the bulk of a transaction's real value. But since Oct. 1, the Rangoon Division government has applied fixed values, varying street by street based on an official assessment, with in-demand areas and property on main roads given higher rates. For example, anyone selling property on certain streets in the highest value area in the city, Golden Valley in Bahan Township, must now pay tax at 37 percent of a fixed price of 325,000 kyat (US$350) per square foot of land. It was hoped that ensuring that a fair level of tax is paid would stop speculation, which had been driving up prices and making Rangoon a less attractive prospect for overseas investors. Separate price levels are set for condominiums, with high rise apartments on some main roads valued as high as 75,000 kyat ($78) per square foot. Than Oo, managing director of Manding Real Estate, said the division government's intervention appeared to be working, as land sales and prices have been stagnant since the fixed rates were introduced. In particular, he said, sales of high value property had ground to a halt. "Rangoon's highest value property market is not active, but land prices haven't decreased because the government fixed the prices [for taxation]," he said. A senior manager at Rangoon-based realtor Unity agreed that the market for high value properties—1 billion kyat ($1 million) and above—had dried up. However, he said the lower end of the market—referring to property prices between 10 million kyat to 100 million kyat ($10,400 to $104,000)—was still seeing sales. "This is the impact of the fixed prices here. The highest-priced land had almost stopped in Rangoon, but for lower-priced land they are still buying," the manager, who requested anonymity, said. "Property prices used to keep going up, but now, people don't want to invest in the highest value properties, especially on Rangoon's main roads, because they have to pay fixed [and high] taxes." He also said that the move was having less of an impact in downtown, where the need for business space was keeping demand high. Myat Thu Win, director of Shwe Mintha real estate, who agreed that the high end of the market had slowed down, said overall demand was still very high. This demand could fuel a boom in activity next year as construction projects—many producing mid-value properties and condominiums—are completed, he said. "We are just focused on the demand rather than on high prices," he said. The post Tax Scheme Slows Rangoon's High-Value Property Market appeared first on The Irrawaddy Magazine. | |
| Business Roundup (November 2, 2013) Posted: 01 Nov 2013 08:52 PM PDT Burma Needs New Mining Law to 'Attract Foreign Investors' Investment in Burma's mining sector is likely being hindered by current laws and restrictions, according to a major North American mining industry magazine. Proposals to overhaul the 1994 mining law "could make life easier for foreign investors in the resource sector," said Canada-based Mining.com. One of the biggest hindrances to foreign investment is the compulsory production sharing contract between the investors and the Ministry of Mines, it said. "Under the current Mines Law, the Ministry of Mines acts a non-equity partner but is still entitled to around 30 [percent] of minerals extracted, plus the relevant income tax and royalties owed," said the magazine. "Yet another area of concern for foreign investors is the rule banning exports of ore, coal and gold, a protectionist measure meant to ensure that processing is done in-country. There are also issues surrounding the ability of companies to move from one phase of an operation to the next, like from exploration to site development, without new contracts." The magazine said that early enthusiasm to invest in Burma has faded "due to a lack of administrative capacity within the country, a weak legal and regulatory system and crumbling infrastructure." Vodafone, Orange invited to Partner With Burma's MPT Into Phone Partnership Despite failing to win operating licenses earlier this year, foreign mobile phone firms Vodafone and Orange have been invited by the state-owned Myanmar Post and Telecommunications (MPT) to take part in a joint venture, the London Financial Times reported. MPT has invited the two firms to join form a partnership with MPT's telecoms arm, "separate from the company's existing regulatory function," the newspaper said, citing "people familiar with the process." Other companies approached include Singapore's SingTel, the source claimed. "The plan offers Orange—which was runner-up in June's licence awards – and a cash-rich Vodafone the chance of a tantalising second bite at a country where mobile usage is less than 10 per cent of the population. But it also involves the uncertainty of partnering a government company," said the newspaper. The license bidding involving dozens of foreign companies was won by Telenor or Norway and Ooredoo of Qatar. The two winners "may now face significant extra competition," said the Financial Times. Poor Infrastructure Hinders Growth of Burma's Medicines Market An inadequate system of support for health care services in Burma is hampering investment in Burma's pharmaceutical sector, a business analysis agency said. "The growth potential of [Burma's] pharmaceutical market can only be achieved over the long term as it is necessary for the country to improve on its basic infrastructure, which is required for the industry," said Business Monitor International (BMI) of London. It forecast that in the short-to-medium term, foreign pharmaceuticals firms were more likely to "set up bases in Vietnam or other countries in Southeast Asia and distribute the products from [there] to Myanmar and Cambodia in order to lower overall operation costs." Even so, BMI predicted that Burma's pharmaceuticals market could grow in 2013 by 5.9 percent, with the country's overall health care sector expenditure for the year being valued at US$1.2 billion, a rise of 2.6 percent. But in BMI's last quarter 2013 Asia Pacific Pharmaceutical Risk/Reward Ratings, Burma is ranked last out of the 18 markets, "given its small pharmaceutical market and the lack of general infrastructure to support healthcare services." Floating Hotels Planned to Avoid Planning Rules and Ease Rooms Shortage Floating hotels are being built to try to ease Burma's acute visitor accommodation problem without long waits for planning approval and construction time involved in bricks and mortar hotels. A 105-room floating hotel is being readied for Rangoon and two or three others are being prepared for the Irrawaddy River at Mandalay, said the regional travel trade magazine TTR Weekly. A 2,000 ton engineless vessel bought from Finland is being converted in a Rangoon shipyard to provide double rooms with attached bathrooms, two dining rooms and bars. TTR Weekly said it was commissioned by the Hla Hla Pa Pa Company which will moor it at a jetty in Rangoon's Botahtaung Township. "Company sources say they intend to have the accommodation open in time for the 27th [South East Asian] Games in December," the magazine said. Meanwhile, two other floating hotels are under construction in Mandalay, and a third is being proposed for Rangoon's Kandawgyi Lake, it said. A 120-room cruiser used to be moored in Rangoon harbor but was towed out of the country at the end of the 1990s. US Law Firm Opens in Rangoon to Help Investors 'Navigate Burma's Laws' A US law firm has opened an office in Burma' commercial capital, Rangoon, becoming the first American lawyers to enter the Southeast Asian nation after it passed its 2012 investment law. New York-based Herzfeld & Rubin said it wholly owned subsidiary Herzfeld, Rubin, Meyer & Rose Law Firm will be staffed by American and Burmese lawyers. "An on-the-ground presence in [Burma] allows the firm to support the needs of its global clients as they navigate business opportunities in Myanmar and, more broadly, in Southeast Asia," a company statement said. Herzfeld and Rubin said it is the "first US investor in the professional services industry to hold a 100% ownership interest under the new 2012 Myanmar Investment Law." The company described itself as having "expertise in emerging and frontier markets." The post Business Roundup (November 2, 2013) appeared first on The Irrawaddy Magazine. | |
| For Burma Artist, Painting is Poetry Posted: 01 Nov 2013 08:49 PM PDT A painting by Mandalay artist Nay Sun is on display at Myanmar Ink Art Gallery in Rangoon. (Photo: Zaw Lin / Ayeyarwaddy Art Gallery) RANGOON — He loves poetry. He paints with watercolor. So when artist Nay Sun from Mandalay decided to hold his second solo exhibition, it was no surprise that he chose to call it "Poem Written With Water." Nearly three dozen of his paintings are now on display at the Myanmar Ink Art Gallery in Rangoon, to mark the 50th anniversary of his start as a professional artist. "For me, painting is silent poetry, and poetry is painting that speaks," the 66-year-old told The Irrawaddy, quoting the Greek philosopher Plutarch.
As the name of the exhibition suggests, each of the paintings on display are watercolor, and all are categorized roughly into three groups: landscape, still life and semi-abstract. Most of the works depict either rural scenes or urban life around Mandalay, where the artist lives. "It doesn't keep you busy, like using other paints, such as oil paints," he says of the freedom and excitement of watercolor painting "But you have to be careful with the final touches. Even the last stroke can destroy the painting." He added, "If you're successful, the feeling is really great." "Poem Written With Water" The post For Burma Artist, Painting is Poetry appeared first on The Irrawaddy Magazine. |
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