Despite lower salary tax, some Burmese are receiving less

 

Friday, 19 August 2011 21:59 Nyi Thit

New Delhi (Mizzima) – The Burmese government has reduced the income tax levied on foreign currency paid as a salary to Burmese citizens living in Burma and foreign countries from 10 percent to two percent.

Burmese who receive salaries in some foreign currencies are getting less now, in spite of the government lowering the salary tax rate from 10 to two per cent. Photo: Mizzima

It sounds good, but Burmese paid in US dollars and some other currencies are unhappy about the lower exchange rate versus the Burmese kyat.

The Ministry of Finance and Revenue said the new tax rate would be in effect for a period of six months from August 19 to February 18, 2012. The exchange rate on August 19 was 720 kyat per one US dollar; 680 kyat per one Foreign Exchange Certificate (FEC); and 596 kyat per one Singapore dollar.

In fact, many Burmese citizens who receive their salaries in foreign currencies say they are now being short-changed.

An employee of a technology company in Burma, who receives his salary in foreign currency, said: “At first, I was happy with the reduction of the income tax. Later, my calculations showed that my salary [earnings equivalent to Burmese kyat] had become lower than when I had to pay 10 percent in income tax.”

A Burmese man who works in Internet technology in Singapore said, “In Singapore, before we had to pay 10 percent of our income [to the Burmese government]. If I don’t pay the tax, the date of expiration on my passport cannot be extended. Now, the tax rate has been decreased to two percent. But, the foreign currency exchange rate is lower so we’ve encountered difficulties.”

However, some observers said that the new government was gradually making some positive changes.

“Although the reduction of the tax rate is good, the government should fix the exchange rate quickly. Lowering the tax rate was not a good cure [in the case of some foreign currencies],” said one observer in Rangoon.

Recently, it was announced that experts from the International Monetary Fund would probably come to Burma in October to discuss the country’s foreign exchange rate policy. The government’s official currency exchange rate is six kyat per one US dollar.

Ref:mizzima news