Revisions to Foreign Exchange Rates for Taxation on Imports and/or Exports and Personal Income Tax Payments Currency 

With effect from 1 January 2025, taxes on exported and imported goods will now be assessed and collected by the Customs Department using a weekly exchange rate based on the Central Bank of Myanmar (CBM)’s market trading rate. This announcement has been made by issuing Notification No. 90/2024, from the Ministry of Planning and Finance and Announcement No. 007/2024, from the Customs Department on 27 December 2024.

This weekly exchange rate referring to market trading rate of CBM which is currently fluctuating around 3,550 Myanmar Kyat (MMK) per US Dollar (USD), replaces the previous CBM reference rate of MMK 2,100 per USD.   

Although the changes take effect from 1 January 2025, Notification No. 90/2024 does not explicitly state whether taxes on exports and imports will be assessed retroactively. This notification applies to all customs-related taxes assessed and collected by the Customs Department upon importation and exportation, including: 

• Customs Duty
• Commercial Tax
• Specific Goods Tax
• 2% Advance Income Tax

Impact on Tax Assessments

Tax assessments based on the weekly exchange rate fixed using the CBM’s market trading rate which is significantly higher than the CBM reference rate will result in higher customs duties and taxes on imports and exports. According to Announcement No. 007, the Customs Department will publish the weekly exchange rate for customs purposes on its official website and social media pages.    

No Updates for Other Taxes 

No announcement has been issued by the Internal Revenue Department (IRD) regarding changes to the exchange rate applied to other taxes, such as Commercial Tax, Personal Income Tax, and Corporate Income Tax collected by the IRD. Consequently, it is assumed that the CBM’s reference rate (1 USD = 2,100 MMK) will continue to be used until the IRD issues a separate notification.

Clarification on PIT Payments in Foreign Currency

On 24 December 2024, the Medium Taxpayers’ Office-2 (MTO-2) released an announcement clarifying the payment of Personal Income Tax (PIT) in foreign currency. Section 30 of the Union Tax Law (2024) specifies that taxes on income received in foreign currency must be paid in the same currency, effective from 1 April 2024. This applies to various income tax types, including Corporate Income Tax, Capital Gains Tax, Withholding Tax, and PIT.

However, the recent MTO-2 announcement clarifies that PIT can be paid in the currency in which an employee actually receives their salary. For instance, if the salary is received in MMK, PIT may be paid in MMK regardless of the currency stated in the employment contract. As noted earlier, since the IRD has not issued an update regarding the exchange rate for conversion to MMK for PIT calculation purposes, the CBM’s reference rate (1 USD = 2,100 MMK) will continue to apply.    For other types of income tax, such as Corporate Income Tax, Capital Gains Tax, and Withholding Tax, the current practices of the IRD are presumed to remain unchanged until further clarification is provided.