15th April 2024: Diplomat – New Taxation and Conscription Policies in Myanmar Are Likely to Increase Irregular Migration

15th April 2024: Diplomat Myanmar’s New Taxation and Conscription Policies Are Likely to Increase Irregular Migration

15th April 2024: Diplomat – New Taxation and Conscription Policies in Myanmar Are Likely to Increase Irregular Migration (well written and up to date summary of an awful situation for Myanmar and its migrant workers)

It’s not only the renewed conscription law – financial reforms targeting overseas workers risk forcing more and more Myanmar nationals into irregular migration.

Original Source: The Diplomat by Hui Yin Chuah – 15th April 2024

As Myanmar grapples with ongoing political turmoil, recent directives have exacerbated the challenges faced by its citizens. The enforcement of conscription laws and the imposition of new taxation and remittance regulations have intensified pressures on the people of Myanmar, and will potentially drive more toward irregular migration. This article delves into the far-reaching consequences of these policies against the backdrop of the nation’s protracted conflict, shedding light on their impacts on mixed migration.

Escalating Conflict in Myanmar Fuels Financial Woes for Military Rulers

The Tatmadaw’s new legislative measures unfolded against a backdrop of intensifying conflict that has engulfed the nation since the military’s seizure of power in February 2021. The de facto authorities are facing serious setbacks as the resistance group and National Unity Government (NUG) in exile claim to have gained control over 60 percent of Myanmar’s territory. However, this also comes at a significant human cost. As of March 2024, approximately 2.5 million individuals have been internally displaced, with an additional 109,100 fleeing to neighboring countries. 

While fighting has been sustained since 2021, in recent months the conflict in Myanmar has escalated dramatically, in particular following the launch of Operation 1027 by the Three Brotherhood Alliance in October 2023. Most recently, resistance forces have claimed success for a 30-strong drone attack in Naypyidaw, the country’s capital and the stronghold of the military regime. 

Over in Rakhine State, clashes between the Tatmadaw and Arakan Army marked the end of a year-long ceasefire in the state, a region already plagued by long-standing ethnic tensions between Rohingya and other Myanmar nationals. 

In Karen State, the Karen National Liberation Army mounted an offensive leading to the capture of Myawaddy, a critical trade hub on the Myanmar-Thailand border.

Clashes between resistance groups and the Tatmadaw had spread to two-thirds of Myanmar as of December 2023, and have led many to believe the military’s control of the country may soon come to an end.

Against this volatile backdrop, the de facto authorities face mounting strain as revenue streams dwindle due to sanctionsfrom the West, economic slowdown due to the conflict, and a revenue denial campaign led by the NUG in exile. This has prompted the cash-strapped military regime to introduce a slew of new policies, including tax hikes on local businesses and households, and an increase in utility tariffs and vehicle registration fees, in a bid to bolster their cash reserves. 

Two such policies, in particular, target Myanmar’s overseas migrant workers and risk intensifying their economic vulnerabilities and potentially driving more into situations of irregularity. 

Financial Reforms Target Migrant Workers 

The first policy requires that a portion of remittances from Myanmar nationals working abroad must come back into the country through formal channels. This means that migrant workers must remit at least 25 percent of their monthly salary through official channels recognized by the de facto authorities. This new rule only applies to those who migrated through regular pathways under a Memorandum of Understanding (MoU) between Myanmar and other countries including Japan, Malaysia, Qatar, Singapore, South Korea, Thailand, and the United Arab Emirates. Failure to comply with this new rule will lead to a three-year travel ban for returned migrant workers upon the expiration of their existing work permits. 

However, this measure has encountered widespread criticism due to the unfavorable fixed exchange rates set by the Central Bank of Myanmar, significantly undercutting the remittance values when compared to informal channels such as hundi networks. Using formal channels to send money into Myanmar inevitably erodes migrant workers’ take-home incomes.

In addition, following the remittance mandate, an amendment to the Union Tax Law 2023, effective from October 2023, was enacted requiring migrant workers to pay taxes on their foreign income. This amendment overturned a previous tax exemption accorded in 2012. Under the new law, Myanmar migrant workers are subject to either a flat rate of 2 percent or a tiered income tax ranging between 10 percent to 25 percent of their earnings. 

This amended law results in double taxation for migrant workers, who are already obligated to pay income taxes in their respective host countries. Along with significantly reducing their already limited incomes, many Myanmar migrant workers have also expressed reluctance to contribute to tax revenue that funds the de facto authorities. 

Migrant workers risk becoming undocumented if they fail to provide proof of tax payment upon their passport renewal. That will have potential and significant flow-on effects relating to the potential increased risk of exploitation in the labor market as well as of arrest and detention for being undocumented.

The additional burden of income tax on migrant workers, coupled with the forced remittances through formal channels, is likely to push already struggling communities to the brink. Migrant workers and their families, who rely on remittances for their survival, will find themselves caught in an increasingly precarious situation, as their income diminishes. However, the ramifications of these measures extend far beyond mere economic strain. The changes could potentially drive some migrants toward irregularity if they fail to comply with the new imposed rules, or in other cases to more risk-laden migration channels to evade the tax burden and forced remittances through official channels.

Conscription Law Drives Regular and Irregular Outward Movement  

Furthermore, on February 10, the de facto authorities announced the enforcement of Myanmar’s  2010 People’s Military Service Law beginning in April. The law mandates military service for men aged 18 to 35 and women aged 18 to 27, with evasion punishable by up to five years’ imprisonment. 

This directive has spurred widespread panic and outward migration, particularly among youth seeking to evade conscription. Thailand has emerged as a prominent destination, evidenced by a surge in visa applications at the Thai embassy. Appointments are being fully booked for weeks ahead, despite a doubled daily quota of 800 applicants. Concurrently, Myanmar’s passport office is facing an overwhelming surge in applications, with advance appointments fully booked until mid-2024. Exploitative brokers have taken advantage of this situation by inflating prices for expedited passport applications. 

The limited availability of accessible regular pathways, exacerbated by the suspension of formal labor migration pathways established through bilateral MoUs mentioned above, has resulted in many resorting to irregular migration, despite its associated risks, to escape enforced military service. 

Furthermore, the laws also have an impact on migrants from Myanmar who are already abroad. For irregular Myanmar migrants and refugees in countries such as Malaysia, where undocumented persons, including refugees and asylum seekers, are deemed “illegal” and subject to detention and deportation, the additional risk of military conscription upon deportation would exacerbate their vulnerabilities. Even for migrants with regular status, the looming risk of being drafted for military services might deter them from seeking services such as document renewal at the Myanmar Embassy or returning to Myanmar upon the expiry of their travel documents, potentially leading to further situations of irregularity.

Addressing the Crisis

Escalating conflict, economic strain, and forced conscription have created a complex web of vulnerabilities and risks, and will potentially drive many in Myanmar toward irregular migration or result in undocumented status. As conflicts in Myanmar continue to escalate, an increase in refugee arrivals to neighboring countries is anticipated, with an estimated 40,000 new arrivals in Thailand projected for 2024. This figure remains conservative given the fluidity of the situation and uncertainties surrounding the activation of the conscription law in April 2024, which may further aggravate migration dynamics. 

Humanitarian actors must bolster their responses to a possible surge in new arrivals to neighboring countries, necessitating increased funding from donors. Host countries can contribute by alleviating the financial burden on Myanmar migrant workers through measures such as reducing or eliminating income taxes, thereby easing the burden of double taxation. Moreover, there is an urgent need to expand regular migration pathways for individuals intending to leave Myanmar. 

Background Reading:

See also: 26th Oct 2023: Myanmar’s military reaches into migrant workers pockets with forced remittance and taxation programmes

See also: 14th August 2023 – Rubber giant Ansell accused of abandoning Myanmar workers in Thailand

See also: 7th April 2024: SCMP – As Malaysia’s door closes on low-paid migrant workers, companies scramble for staff

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