Myanmar nationals here say embassy is double-taxing them. One is a domestic worker earning just $300 a month – too little for the Inland Revenue Authority of Singapore (Iras) to bother her with taxes. Another is a private student here, with no income against her name. The third is a Singapore Permanent Resident (PR) who files his returns and pays his taxes here.
Each of them holds a Myanmar passport, which must be renewed from time to time. But when they visit their embassy, they find there is an extra price to be paid.
The embassy of Myanmar slaps them with its own taxes – irrespective of the fact that their income is being earned and taxed in Singapore, and sometimes even when they are not earning anything at all.
A group of Myanmar nationals have now banded together, claiming that this practice is unfair, especially since their country has signed an agreement with Singapore to ensure that the same income is not taxed twice.
But even as they protest, they know that their hands are tied.
Take 47-year-old Aye (not her real name), a mother of four who arrived here in 2003.
She earns $300 a month, of which she scrimps to save $180. This money supports her family back home and pays for her twins’ school fees.
The Myanmar authorities charge her $30 a month by way of income tax. “For her that is a lot of money,” said her employer, also a Myanmar national, who wanted to be known as Mr Wynn.
If Aye does not pay, her passport may not be renewed, he said.
Lin Let Kyal Sin, 18, is a full-time private student. When she visited her embassy, she too was asked to pay the $30 monthly tax. She protested and showed the officials her student documents. She says that they told her: “First, you are Singapore PR and second, you are 18. That means you can work here.”
It seems that only Myanmar nationals who are on a student pass are tax-exempt.
On the other end of the spectrum is businessman Naing Moe Aung, who, like Mr Wynn, holds Singapore PR status. Mr Aung, 37, has lived and worked here for the past seven years and pays his taxes to Iras. But because his income is deemed by the Myanmar embassy as being of a higher scale, he has to pay them additional taxes of $150 a month.
He is leading a group of more than 300 Myanmar nationals here who are seeking recourse for what they see as a breach of a double taxation agreement (DTA) between Myanmar and Singapore which came into force in March 2000.
No statistics are available on how many Myanmar nationals are subjected to such taxation – which ranges from $30 to $150 a month – but the group estimated the number at between 20,000 and 30,000.
Mr Aung argued that, based on the terms of the DTA and a non-resident citizen provision in Myanmar tax law, only the Iras has the right to tax them on the income that they derive from working in Singapore.
“We therefore find it inappropriate for the Myanmar embassy to tax us again.”
But if they don’t pay they risk losing access to their embassy’s consular services.
While they have written to the Myanmar embassy to waive the tax, it has not responded to their request.
Meanwhile, Iras has told them to file a tax with the Myanmar taxman.
The Myanmar embassy did not revert to Today by press time.
An Iras spokesperson clarified that the length of stay in Singapore is not the only criterion for determining one’s tax residency status under a DTA. There is a “valid basis” for the Iras to take up their case only after the Myanmar taxman confirming that they are non-residents of Myanmar.
Tax experts said that the crux lies in whether the group can prove that its members are residents of Singapore under the DTA. This goes deeper than how long someone has physically been in a given country, as it extends to where one’s personal and economic ties are closer.
But Mr Aung retorted that, especially for people like himself who hold Singapore PR status, “we know clearly where the centre of our vital personal and economic interests is – and that is here”.
Director for human capital at Ernst and Young (Singapore) Grahame Wright pointed out that it is “not uncommon” for people to be taxed in more than one jurisdiction when working overseas, although most countries allow for a foreign tax credit or some level of foreign income exemption to avoid double taxation.
Singaporeans working overseas will generally be exempt by the Iras on their income sourced abroad, he added.
Nine people from the group have come forward and concluded that, between, them, they have paid the Myanmar embassy $31,000 by way of taxes since April 2000. Considering that there are tens of thousands of Myanmar residents here, the total could be much larger.
“We do not want to be offensive,” said Mr Aung. “We are simply asking for our rights as granted under the DTA.”
Ref:burmanet