The military government of Myanmar has ordered migrant workers to pay tax of at least 10% on income earned abroad, just weeks after telling them to remit 25% of their earnings at money-losing exchange rates, according to local reports.
The new requirement has led to a backlash in Thailand where hundreds of thousands of Myanmar migrants are working, according to The Irrawaddy, an independent news organisation.
The workers staged a protest outside the United Nations office in Bangkok on Sunday against the junta’s plan to tax their salaries.
“Myanmar workers have to pay utility bills, rent, as well as work-permit costs and life insurance premiums in Thailand,” said Ko Nay Lin Thu of the Aid Alliance Committee, a group that helps workers from Myanmar.
“These are taxes. There are workers who can’t remit any money back home at the end of a month.”
The new rule means they have to pay double tax, he told The Irrawaddy.
Earlier this month, the government introduced a rule requiring workers abroad to remit at least 25% of their foreign-currency income through the country’s banking system.
The remittances will be converted at the official exchange rate of 2,100 kyats per US dollar. The market rate is about 3,300 kyats. The junta’s reference rate for the baht is just 56 kyats, but the market rate is around 110 kyats.
The requirement gives financial institutions access to a cheap source of funds that the junta will be able to use to shore up its shaky finances.
Migrant workers who do not comply will be barred from working abroad for three years after their current work permit expires.
Previous military regimes also levied income tax on Myanmar migrant workers, but it was repealed under the quasi-civilian government of Thein Sein.
“The regime is now in a tight corner, and is therefore trying to milk ordinary and poor families [for cash],” U Aung Kyaw, a spokesman for the Thai-based Labor Rights Foundation, told The Irrawaddy.
It is estimated that there are as many as 5 million documented and undocumented Myanmar migrant workers in Thailand. About 400,000 documented workers have left Myanmar in the two years following the 2001 coup.