The Ministry of Labour has recently issued Notification 108/2024, dated 28 August 2024 requiring Myanmar citizens working abroad to remit 25% of their wages back home. This is in addition to the 2% income tax that many overseas Myanmar workers must already pay.
Mandatory Remittance Requirement
Myanmar migrants working abroad are required to remit at least 25% of their monthly wages to their families or their own local bank accounts. This remittance must be done either monthly or quarterly. The transfer must be conducted through one of the following official channels:
The official banking system;
Authorised Remittance Business License (RBL) holders;
International remittance services linked to the banking system.
This is significant as migrant workers will often remit funds through informal remittance networks which provide better exchange rates than those offered when transferring through official channels.
Obligations on Licensed Overseas Employment Agencies
For overseas workers employed directly through employers overseas this will be the responsibility of the Myanmar citizen employee.
Many blue-collar migrant workers are employed through overseas employment agencies. In this case the agencies are responsible for ensuring the proper submission of money transfer receipts. These employees must send these receipts back to their respective agencies who are required to keep a record. The agencies are also required to facilitate the remittance process for their workers and submit monthly reports of these remittances to the Ministry of Labour.
Importance of Retaining Transfer Receipts
For high value transactions it is important to be able to show disclosed income. For example, when buying property or a car, authorities will ask to show that the funds used to purchase these items are from previously disclosed income.
If employees want to use the funds earned overseas to purchase items back in Myanmar they will need to also show proof that they have remitted 25% through these official channels.
Penalties for Non-Compliance
Failure to comply with the wage remittance requirements outlined above will result in penalties for migrant workers. Non-compliant workers may face restrictions on traveling abroad for future employment, obtaining Overseas Worker Identification Cards (OWIC), and renewing their passports.
Conclusion
Ministry of Labour Notification 108/2024 imposes clear obligations on Myanmar migrant workers to remit a portion of their wages through official channels. The context of this requirement is the severe shortage of foreign currency reserves that Myanmar is facing. By ensuring that remittances are funnelled through legal, traceable means, the authorities aim to boost foreign currency inflows, in an attempt to stabilise the exchange rate and address the ongoing economic challenges.
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