Myanmar Minimum Wage Update & Changes to Commercial Tax Exemptions for Contract Manufacturing

In accordance with Government notification No. 1/2025, the national minimum wage in Myanmar has been increased, effective 1 October 2025. The updated minimum wage for an eight-hour workday is now MMK 7,800, which is approximately USD 3.71 ((exchange rate: 1 USD ≈ MMK 2,100). This amount reflects both the base wage and additional daily allowances that have been gradually implemented since 2023 to enhance employee welfare and align with rising living costs as below:

New Minimum Wage Structure

It should be noted that the additional allowances do not apply to small businesses employing fewer than ten workers, family-run enterprises, or other small-scale entities excluded under the current minimum wage regulations. These employers are only obligated to pay the base wage of MMK 4,800 per day.

Notification 116/2025: Changes to Commercial Tax Exemptions for Contract Manufacturing

The Ministry of Planning and Finance has issued Notification 116/2025 (“Notification 116”), which abolishes Notification No. 5/1991, originally issued on 8 December 1991. Notification 116 was announced on 9^th October 2025 and is effective from 1 October 2025.

The notification 5/1991 provided a 5% Commercial Tax (“CT”) exemption on the importation of raw materials, sub-assemblies, or packaging materials for finished goods that are not for resale, as well as on the exportation of finished goods to overseas clients, specifically for the purpose of producing finished goods on a Contract Manufacturing basis.

With the introduction of Notification 116/2025, this CT exemption will no longer apply, meaning that importers and exporters involved in such activities will now be subject to 5% Commercial Tax. This change is expected to have a significant impact on the Cut, Make, and Pack (“CMP”) sector.

However, the Taxpayers are advised to await further guidance and clarification from the Internal Revenue Department (“IRD”) before taking action regarding this change as the importation of raw materials, sub-assemblies, and packaging materials for non-resale finished goods, as well as the exportation of finished goods for contract manufacturing basis, remain listed as CT-exempt items under the Union Taxation Law 2025.