Burmese Abroad Welcome Tax Break, but More Reforms Needed
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Thursday, August 05, 2021

Burmese Abroad Welcome Tax Break, but More Reforms Needed

By SIMON ROUGHNEEN Tuesday, January 10, 2012

Thousands of Burmese migrants work at fishing ports in Southern Thailand. (Photo: The Irrawaddy)

BANGKOK — The decision by the Burmese government to end the practice of collecting income tax from migrant workers abroad has been welcomed by Burmese across Southeast Asia, but some say that more needs to be done to make life easier for millions of Burmese working across the region.

In late 2011, the Burmese government announced that workers abroad would be exempt from Jan. 1, 2012, from paying a 10 percent salary levy, deemed by many to be an onerous and unjustifiable burden given that workers paid taxes in the country where they lived and worked.

In interviews last year, Burmese migrants in Malaysia, Singapore and Thailand all railed against the levy, which had to be paid if Burmese nationals wished to renew their passport at the country's embassy.

Kyaw Kyaw, a Burmese national living in Singapore, told The Irrawaddy by email: “I'm glad to hear that tax has been removed. All the people are happy about that news.”

However, despite the new waiver, Kyaw Kyaw still has to pay up for taxes owed last year. “My passport needs to be renewed at the end of this month, so I need to pay around 3,000 Singapore dollars in taxes to the Myanmar [Burmese] embassy. I got a lot of headache from this problem,” he added.

The Burmese government announced the tax reform as part of a series of reforms that also includes changes to the banking system and rules allowing the formation of trade unions. U Chit Shein, the director-general of the Department of Labor in Naypyidaw, said in a recent telephone interview that “the Myanmar government is very interested in this issue and as per President Thein Sein’s speech on March 30, 2011, will work to ensure worker rights both in Myanmar and abroad.”

However, some Burmese overseas say that more needs to be done. Tun Tun, head of the Burma Campaign Malaysia, an NGO that assists Burmese workers in Malaysia, said that the end of the income tax “is a very good decision for our migrants,” but criticized the passport application process at the Burmese embassy in Kuala Lumpur as slow and bureaucratic.

Some who applied for passports in October are still waiting to receive them, he said. “Other nationalities, such as Nepalese or Indonesians, which have a lot of migrant workers here, too, get their passports much faster.”

Burmese passports are valid for just three years, compared with 10 for most other countries, meaning that Burmese migrants have to undertake the time-consuming process much more often than others. “It should be for 10 years,” said Tun Tun, speaking by telephone from Kuala Lumpur.

While millions of Burmese migrants travel abroad without official documentation and therefore don't have to deal with their embassy or pay Burmese tax, the legal vacuum leaves them vulnerable to exploitation and trafficking, particularly in Malaysia and Thailand.

The Malaysian and Thai authorities have introduced measures to enable migrants to register legally, which means migrants need to acquire passports from their home countries.

Migrants send hundreds of millions of dollars back to impoverished families every year, and the Burmese government and banks see a business opportunity. On Nov. 25, 2011, the Central Bank of Myanmar granted eleven private banks permits trade foreign currencies.

Andy Hall, a migrant worker advocate at Mahidol University in Bangkok, said that the Burmese government is trying to formalize remittances through the banking sector, which might be a challenge given that an informal money transfer system, or hundi, enables Burmese abroad to send money back to families even in remote areas where banks are not present.

“It will be difficult for banks to compete with that network,” said Hall, who added that “there is a lot of concern among migrants that the bank fees will be high.”

The Burmese government is said to envisage a longer-term Philippines-style policy where emigration is supported as a means of compensating for a stagnant or under-performing domestic economy. A tenth of Filipinos live overseas, and money that “OFWs” (overseas Filipino workers) remit makes up approximately the same percentage of the country’s economy.

A study published by the World Bank in 2008 estimated that Burmese remittances formally totaled US $150 million. However, other studies suggest that the total could be three to four times that amount. With the bulk of the money coming through the hundi system, a precise measurement is impossible.

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Myanmar Patriots Wrote:
Moe Aung Wrote:
"About time the tax double whammy ended. The hundi system is a time honored one and it would be very difficult if not impossible to ban it. It has seen off even the Islamic bank BCCI, unable to compete with it and abused by the Western intelligence agencies laundering their funds. http://www.laundryman.u-net.com/page9_bus_prone_ml.html"
OH DEAR DEAR, Moe Aung citing BCCI. that bank was run by crooks. Moe aung must see a shrink, to get rid of his ideas. Looks like he reads a lot and understands nothing.
Pitiful fellow.

KML Wrote:
I agree with Marty Myanmar that there have been bullying, intimidation, obliteration, jealousy, corruption, nepotism and cronyism in the workforce since BSPP regime. Meritocracy was always overridden by unethical loyalties. Those human resources issues, our country has gone through torrential brain drain in the last five decades.
During BSPP time, the only incentives for middle range civil servant was to go overseas (scholar or training) and save some money to buy a car. Gone are the days now and things are quite clearer.
I hope “meaningful functional government” in waiting will address important human resources issue timely.

Marty Myanmar Wrote:
First some understanding of the way things work in the Myanmar government - 1) its a burden to actually work for your salary, you are entitled to it! 2) if its a tough decision then send it up the pipeline, if you take the initiative your superior will think that you have plans to take his place and will come down hard on you, 3) the superiors will not let any decision be made by the people down below, so sadly the people have to bear the burden that old outdated practices and mindsets heap upon then.

when government officers go abroad they always say that we are a poor country and have no money to do anything.

so you think that changes will take place?? only for the first 2 years of the new government, after that the government will have to do its real job - make itself rich! only DASSK can change that or not?

KML Wrote:
I am sure I did not discuss with MaLay or I do not even know. But the comments are identical!

Ma Lay seems economist or accountant but I am from medical background.

KML Wrote:
Tax is an important factor to run a country smoothly, comfortably & appropriately.
Our Tax system in the past ( as well as now!) is still arbitrary. Tax evasion is rampant due to corruption, cronyism & nepotism. The government has to abolish collection of voluntary donation from tycoons and businessmen. They usually donate 10 million but evade 10,000 million.
The tax system needs major overhaul to get better budget. Reasonable portion needs to go to Health & Education instead of Defence. Sustainable tax generating sectors ( most of the time Government Link Companies) are telecommunication, banking, petroleum, energy & tourism. Once you have invested infrastructure, then reap the profit and tax non-stop.
In some countries overseas workers are given exemption of tax and other incentives to spend foreign currency and to buy property at to encourage legal flow of foreign money and also stimulate the housing market. Win-Win for all. Any way corruption culture needs to be at a bay!

Ma Lay Wrote:
Noticed that income tax treatment are not specifically indicate at announcement for salary income received by seaman who are travelling international sea and working at (a) local/ government owned shipping lines (b) foreign owned shipping lines.
Advices to government
(1) To review and revise present tax laws such as income tax, corporate tax, sales tax & etc as which are too outdated and no longer reflect/ suitable current situation and economies.
(2) To implement effective tax system to impose taxpayers correctly in order to avoid tax evasion especially business. In every country Tax income is the major source of income for government spending and budget allocation such as Education & health.
(3) Respective professionals/bodies including foreign advisors such as Revenue Authority, Association of lowers, Accountancy Council, Intellectual Professors, Economist & etc should involve in reviewing and implementation process of New Tax Law.
(4) taking feedbacks from peoples before enforced the new tax law

KML Wrote:
@MHK"Please remember when Myanmar was under British rule, British treated “Saya San”, “Boygoke Aung San” as terrorists, bandits, criminals, we all know that “Saya San” and all of his comrades were beheaded by British. However, without these leaders (treated by British as terrorists and bandits), Myanmar would not gain the independence in 1947."

Very True!

Myanmar Patriots Wrote:
Taxation WITHOUT PARTICIPATION is fundamentally unacceptable. It is pure robbery!Boston Tea Party is the shining example of the people's right to revolt against such robbery.

In our own country the robbery is by the military regime. For the honour of Tatmataw to be redeemed such robbery must end.

Daniel Wrote:
Interesting to know. Unfortunately Waan went a bit too early.

Moe Aung Wrote:
About time the tax double whammy ended. The hundi system is a time honored one and it would be very difficult if not impossible to ban it. It has seen off even the Islamic bank BCCI, unable to compete with it and abused by the Western intelligence agencies laundering their funds. http://www.laundryman.u-net.com/page9_bus_prone_ml.html

MHK Wrote:
3. In order to be able to transfer money to Myanmar by bank, all economic sanctions must be lifted without question as soon as possible
4. To quicker the economic and social progress , Myanmar government need to free all political prisoners as soon as possible regardless of lifting of economic sanctions

The political prisoners mean all prisoners politically motivated : Burmese, Karen, kachin or whatever ethnic : Please remember when Myanmar was under British rule, British treated “Saya San”, “Boygoke Aung San” as terrorists, bandits, criminals, we all know that “Saya San” and all of his comrades were beheaded by British. However, without these leaders (treated by British as terrorists and bandits), Myanmar would not gain the independence in 1947.

Myanmar’s Democracy movement must be distinguished from “foreign influence or foreign interference”. Myanmar democracy movement means we want to build a more open society, more just and fair system with equality of chance for everyone.

MHK Wrote:
The Tax break is really welcome, it is really a good news for all of us who are working abroad. Agree that more still need to reform. The followings ideas come to my head:
1. Agree with Tun Tun, our passport should be extended fast and for 10 years, otherwise not practical why?
i.e those who must travel a lot professionally can be disturbed when the passport term is coincided with it’s termination and as a consequent, his/her professional progress can be touched indirectly
2. Burmese nationals must be able to transfer our money back to our families by bank : safe and avoid money laundering , one more reason for it:
i.e: because of the global financial crisis, most countries in Europe limit the amount of money we can carry in cash and we all have to declare how much amount of money we carry and for which reason at the custom, this amount can seriously be reduced in very near future (ex: in Euro zone)

KML Wrote:
Easing tax is good. Although the government will not receive any tax money, many more Burmese working abroad will visit Burma during holiday ( with that 10% tax money, you can visit twice a year!) and indirect increase in ait travel and money spent at home country as well as will accept quite positively on the government. I would like to give following advice to the government of the day:
1. Simplify visa requirement or No visa requirement for former Burmese citizens ( exiled, resettled refugees etc..) so that tourism sector will boom proportionately.
2. Public relation campaign on tourism will work now. It failed in 1996 as situation has changed. I think trouble makers (MI) are no more!!!
3. abolish existing foreign currency rule for visitors so that they will bring more money to spend in Burma.

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