THERE continues to be a high-level of illegal remittance from Myanmar workers abroad who resist the authorities’ demands that they transfer funds back to Myanmar through government-owned banks, say overseas employment sources in Yangon.

U Kyaw Min, the managing director of
a Yangon-based agency arranging overseas employ-ment for Myanmar nationals, said the majority of workers abroad did not send funds home through legal channels.

This was so they could avoid paying the 10 percent income tax to the government, he said. Myanmar workers abroad must also remit 30-50pc of their wages back to Myanmar, depending on where they work.

U Soe Min Aung, secretary of the Myanmar Overseas Seafarers Association (MOSA), said using illegal brokers – who have offices in Myanmar as well as abroad and deliver money to workers’ families after it is paid to the foreign branch – was risky and regarded as money laundering.

“That’s why our association urges all our members to remit their salaries through the state-sanctioned Myan-ma Foreign Trade Bank (MFTB) instead of using illegal remittance agencies,” he said.

Since August 2005, the government has ordered any money earned abroad that is destined for Myanmar to be transferred through the MFTB. Such money is considered as export earnings and failing to use the bank means there is a risk of being charged with importing goods without paying the due tax.

However, the lack of red tape and speedy delivery when using illegal remittance channels make them an attractive option to earners overseas.

Commercial importers are also regular users of unsanctioned brokers. To avoid paying income tax, traders have been known to undervalue exports in declarations to the government and only receive a fraction of their payment through the MFTB or the Myanma Commercial and Investment Bank (MICB). They receive the remaining money owed via illegal brokers.

Prior to closer official scrutiny of imports and exports by the Trade Council in 2005, the Export Import Supervisory Committee estimates about US$25 million a month passed through illegal channels.

Yangon-based timber exporter U Win Soe said there was a well-established and large-scale illegal remittance system between Singapore and Myanmar.
It cost about K15 per dollar sent through unofficial brokers, he said.