The military government in Myanmar is demanding that expatriate workers remit at least 25% of their foreign currency income through the country’s banking system, according to local reports.
The money the workers remit will be converted to kyat at the official rate, which is more than 40% less than the market rate that is widely in use, said The Irrawaddy, an independent Myanmar news agency.
In effect, it said, government-linked financial institutions will have access to a cheap source of funds that the junta will be able to use to shore up its shaky finances.
The implications could be significant for the estimated 2 million Myanmar nationals working legally in Thailand, as well as their families at home.
Since Sept 1, migrants who are due to leave Myanmar for jobs abroad must open a joint account at a bank regulated by the Central Bank of Myanmar, and remit 25% of their earnings to that account, the regulation says.
CB Bank, one of Myanmar’s largest private banks, has told migrant workers already abroad that they must remit a quarter of their salaries either monthly or every three months through “official” channels.
However, while the junta’s reference exchange rate for the Thai currency is just 56 kyats to the baht, the prevailing market rate is around 100 per baht, according to The Irrawaddy.
A migrant who earns 20,000 baht a month will have to remit 5,000 baht through the official banking system. The banks will get 5,000 baht for just 280,000 kyats while unlicensed exchange operators will pay nearly 500,000 kyats for the same amount, the news agency said.
Those who are already abroad and do not comply with the new rule will be barred from working abroad for three years after their current work permit expires, the announcement said.
Recruitment agencies have been advised to revise their contracts with migrant workers and to be responsible for transferring the 25% remittance through the Myanmar banking system.
The government is offering some incentives, saying those who remit money through the official banking system or financial service providers licensed by the central bank can make investments and buy property in Myanmar tax-free.
Ko Nay Lin Thu of the Thailand-based Aid Alliance Committee, which helps migrant workers, has condemned the new requirement.
“We don’t want to give our hard-earned money to them. We have to pay tax on our income in Thailand, and our remittances will be cut now, which is unacceptable. This is an exploitation of us migrant workers,” he told The Irrawaddy.