Yangon International Airport's Terminal 1 on March 12, 2016. (AFP)

Blocking the exits: Myanmar junta turns the screws on migrant workers

Desperate for foreign exchange, the regime is taking harsh steps to enforce tax and remittance rules for migrants and making it harder for them to travel.

By FRONTIER

Ma Thida had planned for months to work in Singapore, but when she went to Yangon International Airport in late August to take her flight to the city state she was not allowed to embark.

In Myanmar there are many different types of passport depending on your purpose of travel. Although Ma Thida was travelling to work, she held a Passport for Visit, intended for tourism and social trips, rather than a Passport for Job.

Previously, this would likely not have stopped her passing through immigration. Because of the time and expense involved in migrating to work officially, many Myanmar people prefer to travel on PVs instead and then find jobs overseas. But in a bid to tax all migrant workers and ensure they send money home through official banking channels, the cash-strapped junta is trying to close the PV loophole.

This is happening at a time when hundreds of thousands of people are trying to leave Myanmar by whatever means possible due to raging conflict, economic collapse and a nationwide military conscription drive. A junta press release on August 29 said more than 2 million people left the country between January 2022 and July this year. This includes over 500,000 in 2022, nearly 1 million in 2023 and more than 700,000 this year as of July. But with many people illegally crossing land borders, the real numbers are likely far higher.

Outbound travellers holding PVs at international airports and official land border crossings are now required to show return tickets, hotel bookings and evidence of sufficient funds to prove they’re making temporary trips unrelated to work. However, Ma Thida said authorities in Yangon airport were so zealous in rooting out suspected migrant workers that they barred her and several others on sight, without bothering to ask for the supporting documents.

“If you’re under 40, the inspection team at the airport doesn’t ask further questions and simply won’t allow you to embark. I had to return from the airport,” the 34-year-old Yangon resident told Frontier.

The junta announced the new screening process on August 15, claiming that many people were travelling on PVs with the intention of working. It said that besides obtaining a PJ, migrant workers must also register with the Ministry of Labour and get an Overseas Worker Identification Card before travelling.

“People used to travel with PVs and then work abroad without a problem, but now this practice is being investigated,” said the owner of an overseas job placement agency in Yangon’s Thingangyun Township.

The heightened scrutiny has prompted some people to rethink their plans, although they remain desperate to leave Myanmar for work.

“I initially planned to go to Thailand with the PV I had,” said a 24-year-old woman in Yangon’s East Hlaing Tharyar Township. “My intention was to stay at a friend’s house, get a job and start working. But now it’s not easy to leave in this way. If I’m checked at the airport and sent back, I’ll lose money.”

“I need to work abroad for my family, and I’m still planning to go to Thailand,” she told Frontier, adding that she was struggling to navigate the formal migrant worker registration process and was unsure when she could leave. “I’m depressed because nothing is happening.”

Tax shakedown

Overseas job agents and labour activists say the junta is taking greater steps to enforce registration because it’s eager to collect income tax from migrants, at a time when the regime is running short on foreign currency. Registered overseas workers have been required to pay a 2 percent income tax since October 1 last year.

Additionally, at least 25pc of migrants’ salaries must be sent home to relatives, friends or a domestic bank account through licensed transfer services. This is part of efforts to suppress the use of informal transfer services, known as hundi, which the regime suspects are being used to fund opposition activity. The continued popularity of hundi is also frustrating the regime’s attempts to improve its dismal global ranking on combating money laundering and terrorist financing.

Forcing more migrants to use licensed remittance services would also, by itself, boost the regime’s foreign currency reserves. This is because of the gap between actual market exchange rates and the rates the junta has imposed on banks and mobile money providers, which overvalue the Myanmar kyat. The rate used by Myanmar banks for remittance payments was K4,150 to the US dollar on October 3, compared to a market rate of about K4,700. However, both rates fluctuate wildly and the difference between them has previously been much wider.

Regardless, the junta pockets the difference. Economist Mr Jared Bissinger has argued that such income now rivals natural resource exports as the regime’s most important source of foreign exchange. While this estimate includes money gained from other currency conversions, such as the exchange of export earnings into kyat, remittances could represent a large proportion. In September 2022, the junta’s Ministry of Labour said money sent home by migrant workers had exceeded US$6 billion since 2014.

As well as trying to extract more money from migrant workers, the junta is also trying to stop young men from escaping conscription into the military.

In February, the regime began enforcing a 2010 military service law for the first time, saying any man aged between 18 and 35, and woman between 18 and 27, could be called up to serve. Tens of thousands of men have been drafted so far, and many fear women will soon be summoned too. Because the military is widely hated and is facing historic defeats to opposition forces, hundreds of thousands of young people are estimated to have left Myanmar this year to avoid the possibility of being drafted.

To stem the exodus, the junta on May 1 banned men between the ages of 23 and 31 from using PJs to travel overseas. Many PJ holders applied to change them to PVs, but on June 6, the regime blocked applications to do so. Frontier could not confirm whether the policy has changed since then.

People gather outside the embassy of Thailand in Yangon to apply for visas on February 16, days after the junta announced it would impose military service. (AFP)

Pressure points

The regime’s attempts to squeeze migrants, however, appear to have had only mixed success so far.

A representative of another overseas job placement agency said many workers are still avoiding official remittance channels because of the discrepancy with the market rate.

“If the exchange rate for converting their wages were aligned with the market rate, or if the difference were minimal, workers might be more inclined to transfer money through official channels,” he told Frontier.

Ma Ei, joint secretary of the Federation of General Workers Myanmar, claimed that few migrants were paying taxes either.

A man from Magway Region registered as an overseas worker with the regime and working in Japan said, “When I send money back home, I use a remittance service near me without paying taxes. The military council is trying to extract money from us. But no matter what happens, we won’t comply with their demands.”

But to ensure compliance, the regime is able to exploit some pressure points – in particular, the renewal of documents that migrants need to keep their immigration and employment status legal, including passports and other proofs of identity.

A Myanmar man working in Thailand said he had to pay the 2pc income tax to obtain a Certificate of Identity, a document issued by Myanmar officials that functions similarly to a passport. He said the payment amounted to 1,800 Thai baht ($55) for one year. “While I’m not happy paying taxes to the military council, I need a driver’s licence and bank account and I need to live legally in Thailand, so I have to comply with the tax requirements,” he told Frontier.

Moreover, the junta announced on August 28 that it would revoke migrants’ Overseas Worker Identification Cards if they failed to send a quarter of their salaries back home using official channels. Among other things, this would make it harder for them to leave Myanmar again after taking trips home.

The labour ministry is also requiring job placement agencies to provide it with evidence that their workers have made the official remittance payments. The ministry said on September 7 that it had suspended more than 140 agencies for failing to do so.

However, the owner of one agency in Yangon said they were often powerless to get workers to comply.

“The unnecessary restrictions and obstacles imposed by the military council are causing difficulties for everyone. We cannot compel workers to remit 25pc of their income in the prescribed manner, and they are also uncomfortable disclosing where their money is being sent,” he told Frontier.

Daw Moe Sandar Myint, president of the New Light Federation of Labor Unions Myanmar, said the new financial requirements are heaping pressure on migrants who are already experiencing unfair work conditions in countries such as Thailand.

“Workers find discrepancies between the workplaces and wages promised by the agents and the actual conditions upon arrival. They often encounter different workplaces, lower wages and uncomfortable living conditions. When they report these issues to the agency, the agency doesn’t take any responsibility,” she said.

“Due to the conscription law, workers are reluctant to return after going abroad,” she added. “After working for a long time, they establish valuable connections and secure better positions. However, most of them still work in uncomfortable conditions.”

The junta’s measures are also encouraging more workers to migrate through illegal routes, using brokers. This can make them even more vulnerable to exploitation, but some are able to formalise their status abroad if their employer is helpful.

“When my daughter went to work in Thailand last year, she contacted a broker at the border,” a woman in Nay Pyi Taw’s Zabuthiri Township said. “I paid the broker K2.6 million and he arranged a job for her.”

The woman explained that her daughter had a PJ but lacked other official documents such as an Overseas Worker Identification Card. “Going through legal channels would have involved many additional steps, so I encouraged her to take the easier and faster route,” she told Frontier. “Her employer took full responsibility for her residence permit in Thailand and handled all the arrangements, so everything has been fine so far.”

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