The Myanmar Investment Commission (MIC) has allowed Super Seven Stars Motors Industry Company (SSS) to import 4,500 Korean-made KIA vehicles with tax exemption since December 2012.
According to the agreement made between the MIC and SSS, autos should be imported in pieces and assembled on arrival but an inspection on July 9 suggested the firm was breaching the deal.
The MIC has only allowed three KIA models to be imported: the Optima, Sportage and Sorento. But the company is accused of importing KIA Rio and Carens, which are not included in the import licence.
Most autos imported by SSS were found to be almost complete while the 30-40 per cent custom duty, 25 per cent commercial tax and some registration fees were waived.
The company reported that it had imported 1,370 KIA vehicles since the licence was granted, including 288 is Optimas, 504 is Sportages and 578 is Sorentos.
Under the system where an Optima is assembled in Myanmar, it will cost US$8,500 with the licence fee and is sold for US$45,000. The KIA Sportage’s import price is US$8,800 but it is being sold for US$46,000 after supposedly being reassembled. And for the Sorento, the import price is US$8,900 and it is being sold for US$54,000 after reassembly.
When imported complete, the Optima will cost about US$31,000, including tax, the Sportage costs about US$23,000 and a Sorento US$31,900.
It is alleged that the company has dodged billions of kyats in tax.