The exemption, effective starting January 1, 2012, will also cover Burmese working in Burma who are paid in foreign exchange certificates, an official from the Internal Revenue Department said.

“This is some relief for tax payers,” he said. “The intention of this reform is to encourage more cash inflow to the country through remittances.”

At a Union Government meeting on August 18, 2011, the Finance and Revenue Ministry issued a notification reducing the tax rate of income tax payable in foreign exchange by Burmese nationals living in Burma and earning money in foreign exchange certificates, and those working in foreign countries from 10 per cent to 2 per cent.

Now even the 2 per cent tax has been eliminated, the official said.

“They had many difficulties in paying taxes in the past and now more foreign currency will flow into the country by giving this exemption. Previously they had to transfer money to their families through Hundi or illicit banking channels. Now they can use official banks for their remittances,” he told Mizizma.