Taxing Times: Myanmar Migrant Workers Face Financial Strain Amid New Taxation Laws

Taxing Times: Myanmar Migrant Workers Face Financial Strain Amid New Taxation Laws

The New Burden on Myanmar Migrants

In a move that has sparked widespread controversy, Myanmar’s cash-strapped regime has declared that all Myanmar migrant workers must pay a minimum tax of 10% on their earnings made abroad. This decision has led to significant protests in Thailand, a country that is home to approximately five million Myanmar migrants. The new tax, as explained by Ko Nay Lin Thu from the Aid Alliance Committee, adds to the existing financial burdens such as utility bills, rent, work-permit expenses, and life insurance premiums. This could potentially leave some migrant workers unable to remit any money back home.

Mandatory Remittance Rule

Earlier this month, the regime introduced another stringent rule, requiring Myanmar nationals working overseas to remit at least 25% of their foreign-currency income through the country’s banking system. Non-compliance with this rule could result in a three-year ban from working abroad. The remittances will be converted at the official exchange rate, which is significantly lower than the market rate, further disadvantaging the migrant workers.

Historical Context and Details of the Tax

Previous military regimes in Myanmar also implemented an income tax on migrant workers, however, this was repealed under Thein Sein’s quasi-civilian government. The latest tax will be levied on foreign-currency income of expatriate workers from October 1 to March 31 of next year. The new taxation law imposes a 5% income tax on those who earn between five million and 10 million kyats per year, 10% on those earning between 10 million and 20 million kyats, 15% on those earning between 20 million and 30 million kyats, and 25% on those earning more than 30 million kyats a year.

The Impact on Myanmar Migrant Workers

Many Myanmar workers, who have been denied overtime due to the Covid-19 pandemic and political instability in Thailand, are barely managing to survive on 300 baht (US$ 8.25) per day. They are struggling to meet their basic needs and remain in Thailand because they are unable to return to Myanmar. Critics argue that the regime is exploiting ordinary and poor families for financial gain. Many migrant workers feel that the regime is ignoring their struggles and exploiting them, and some have expressed their refusal to comply with the new tax.

It is estimated that about 400,000 licensed migrant workers have left Myanmar in the two years following the 2001 coup. The new taxation and remittance laws could further deter Myanmar nationals from seeking work abroad, potentially exacerbating the country’s economic and social woes. The regime’s move has been met with strong opposition, with critics accusing it of exploiting vulnerable families and workers for financial gain. The impact of these new laws on the workers and their families, as well as on Myanmar’s overall economy, remains to be seen.