New Wage Increase for Myanmar Workers
On 9 August 2024, Myanmar’s National Committee for Setting the Minimum Wage issued a notification increasing the minimum wage of Myanmar workers nationwide, with effect from 1 August 2024. The new rate includes an additional allowance of MMK1,000 on top of the existing daily wage of MMK4,800, bringing the total minimum wage to MMK6,800 for an eight-hour workday.
This change also applies to government employees and day labourers. Wages for daily employees and day labourers in government departments and organisations were increased by 1,000 kyats on top of the existing fixed-wage of MMK4,800 for an eight-hour workday, starting in October 2023. This monthly allowance was introduced to provide further support to these workers. As of 1 August 2024, an extra 1,000 kyats allowance has been added, bringing the total daily wage for day labourers to MMK6,800. The wage adjustment does not apply to (i) small businesses with fewer than ten workers, or (ii) family-owned businesses.
CBM Eases Requirements on Export Earnings Conversion
On 7 August 2024, the Central Bank of Myanmar (“CBM“) issued Notification No. 37/2024, adjusting the percentage of export earnings that must be converted into Myanmar Kyat. Previously, under Notification No. 26/2023 (dated 6 December 2023), exporters were required to convert 35% of their export earnings at CBM’s reference exchange rate.
CBM has now lowered this conversion rate to 25% for export declarations, effective from 8 August 2024 onwards.
An announcement on CBM’s website, dated 8 August 2024, also allows exporters to apply the new rate to retain 75% of their export earnings in foreign currency for export declarations made between 3 April 2022 and 7 August 2024. The deadline to complete this adjustment is 30 November 2024. Failure to meet this deadline will result in exporters having to revert to the previous 35% conversion rate, along with potential penalties such as licence revocation, blacklisting, imprisonment, or other legal actions under the Myanmar Companies Law and the Foreign Exchange Management Law.
Copyrights and Related Rights: New Regulations on Establishing Collective Management Organisations
The new regulations on the establishment of Collective Management Organizations (“CMOs“) in Myanmar, which came into effect on 6 August 2024, provide a comprehensive framework for managing copyrights and related rights. CMOs, which are non-profit associations formed by copyright owners to manage their rights, must apply to the Intellectual Property Agency (“Agency“) for registration. Applications require detailed organisational information, proof of fee payment, and agreements on copyright management. Approved CMOs receive a five-year registration certificate.
The regulations outline procedures for suspension, cancellation, and renewal of registrations. CMOs can be suspended for non-compliance or misconduct. If issues are not resolved, authorisation may be cancelled. An application for renewal must be filed three months before expiration. CMOs will be fined if they miss this deadline.
CMOs must maintain transparency, accountability, and good governance. They are required to have specific teams, conduct annual general meetings, and submit reports to the Agency. They must also negotiate copyright permissions, collect royalties, and distribute the royalties transparently to members. Dispute resolution mechanisms include amicable settlement, arbitration, or litigation.
The regulations allow up to two CMOs to manage the same type of rights within a sector, and require existing CMOs to reapply within three months. The Agency has the authority to inspect documents and request reports. These rules aim to ensure fair representation and efficient management of copyright holders’ rights while facilitating the licensing of copyrighted works.
Myanmar Competition Commission Determines Precedent Case on Deceptive Branding
There has been a notable development regarding a recent case brought before the Myanmar Competition Commission (“Commission“) which sets a precedent on Myanmar’s competition enforcement practices. The Commission issued the decision on 4 July 2024.
The case was brought by a Thai cement products manufacturer which has an established business reputation and presence in the Myanmar market. It was found that a local individual had been manufacturing and selling similar products with packaging nearly identical to that of the Thai manufacturer, using the same designs, marks, and colours, and including deceptive information on the packaging. The Thai manufacturer thus lodged a complaint to the Commission, alleging unfair competition based on product deception which misled customers in the market. The Decision-Making Committee of the Commission ruled in favour of the Thai manufacturer, requiring the local individual to cease the production and distribution of the products and change his packaging designs so as not to resemble that of the Thai company’s products.
The approach of the Commission in this decision is significant in Myanmar’s competition law, setting a precedent for local and foreign businesses in Myanmar, and highlighting that the Commission’s scope may go beyond disputes relating to traditional competition concerns to include non-traditional ones such as branding and marketing.
New Enforcement Procedures under Tax Administration Law
Myanmar’s Ministry of Planning and Finance has issued Notification No. 44/2024 (“Notification“), outlining enforcement procedures for the Tax Administration Law (TAL). The Notification took effect on 13 June 2024. The procedures focus on tax evasion, impeding tax administration, and failure to maintain secrecy. Tax evasion is considered an arrestable offense, while the others are not.
- Tax evasion: Taxpayers evading taxes face fines of MMK250,000 (approx. US$120), 100% of the evaded tax, or up to seven years of imprisonment. Authorities will assess documents and issue notices, and may seek approval for criminal proceedings if the requirement to pay taxes is not met.
- Impeding tax administration and secrecy violations: Offenders may face fines or imprisonment. Notices will be issued, and deadlines may be extended. If the applicable deadlines are not met, the taxpayer may be prosecuted for non-cognisable offences.
Companies, partnerships, trusts, group businesses, and representatives, including those managing businesses on behalf of foreign nationals or deceased taxpayers, may be held liable in civil and criminal proceedings.
Businesses must maintain accurate records, implement internal controls, and respond promptly to notices to comply with the law and avoid severe penalties. Seeking legal and tax advice is recommended for compliance.
Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice
