CARI Captures Issue 639: Myanmar to begin taxing nationals working abroad to boost foreign-currency reserves

Given recent developments in the region, Captures will widen its scope to include news related to members of the Regional Comprehensive Economic Partnership (RCEP) agreement which was signed towards the end of 2020. The other weekly newsletters under CARI, China-ASEAN Monitor and Mekong Monitor will also be consolidated into the Captures newsletter. We hope this new version of Captures will serve you better and look forward to providing a curation of stories relevant to ASEAN and its trading partners.

Myanmar to begin taxing nationals working abroad to boost foreign-currency inflows
(07 January 2024) Since mid-December 2023, Myanmar’s embassies in key Asian countries have announced a series of new tax rules to impact Myanmar nationals working in said countries in order to boost foreign-currency inflows. For Myanmar nationals currently residing in Japan, for instance, they are now subject to a 2% income tax, with the amount of tax to be paid depending on their respective income bracket. Myanmar nationals working in South Korea, Singapore, Thailand, and Malaysia are also facing a 2% tax rate as a general rule, though the final amounts owed vary depending on residency status and income level. Under tax reforms for fiscal year 2023, the Myanmar government began requiring nationals living abroad to pay income taxes in the foreign currencies they earn, effective 01 October, 2023.

State-owned conglomerate Sime Darby Bhd purchases majority stake in UMW Holdings
(7 January 2024) In December 2023, Malaysian state-owned conglomerate Sime Darby Bhd purchased a majority stake of 61.2% in local automobile major UMW Holdings, hoping it will open up further opportunities in Malaysia’s automobile sector by adding the Toyota and Perodua brands to its local sales and distribution portfolios. Sime Darby Bhd has interests in the automobile and industrial sectors through its subsidiaries Sime Darby Motor and Sime Darby Industrial. Sime Darby Motors focuses on retail, distribution and assembly of vehicles, including for brands like Jaguar, Porsche, BMW, Audi, Volvo, Mazda, Ford, Kia, and BYD. For its part, UMW has interests across the automotive, equipment, manufacturing, engineering and aerospace sectors. UMW operates Toyota’s assembly and manufacturing operations in Malaysia through joint venture UMW Toyota Motor, and also controls leading budget car brand Perodua.

Malaysia’s small-to-mid-cap stocks outperform biggest companies due to Johor projects
(08 January 2024) Digital infrastructure and construction projects in the southern Malaysian state of Johor are fueling Malaysia’s small- to mid-cap stocks. The MSCI Malaysia Small Cap Index rose by 15.7% in 2023 in comparison to a 2% gain for the large-cap index, the latter of which includes prominent stocks such as Maybank and Petronas Chemicals Group. The state of Johor has emerged as one of the fastest-growing markets in Southeast Asia, with much of this development heavily connected to neighboring Singapore. Malaysia and Singapore are currently seeking to deepen economic ties by setting up a Special Economic Zone (SEZ) in Johor that would bring tighter business links and better connectivity.

Malaysia’s total palm oil stocks fall by 4.64% to 2.29 million tonnes in December 2023
(10 January 2024) According to the Malaysian Palm Oil Board’s latest industry performance report for December 2023, Malaysia’s total palm oil stocks fell by 4.64% to 2.29 million tonnes in December 2023 from 2.40 million tonnes in November. Meanwhile, crude palm oil (CPO) inventory decreased by 9.43% to 1.20 million tonnes from 1.23 million tonnes in November. CPO production fell by 13.31% to 1.55 million tonnes, while palm oil exports dropped by 5.12% to 1.33 million tonnes in December from November’s 1.41 million tonnes. Meanwhile, CPO imports stood at 11,103 tonnes in the same month.

Transition plan for jeepneys faces pushback from drivers
(08 January 2024) The Philippines government’s plan to force drivers to transition from traditional jeepneys to minibuses has faced pushback from jeepney drivers who argue they cannot afford to transition their vehicles. Due to jeepney’s diesel engines releasing large amounts of air pollution, the government has been seeking to get rid of them. It had set 31 December, 2023 as a deadline for jeepney drivers and operators to switch from operating traditional jeepneys to minibuses prescribed by the Land Transportation Franchising and Regulatory Board (LTFRB). Jeepney drivers would have to pay US$50,000 for a new minibus. Authorities estimate that 40% of the jeepneys in Metro Manila and 70% nationwide have applied to join the cooperatives. Over the recent holidays, thousands of drivers went on strike and protested in front of the Presidential Palace, calling upon the government to cancel the deadline.

The Philippines and Indonesia agree to bolster cooperation in energy and security
(10 January 2024) During Indonesian President Joko Widodo’s visit to Manila, both Indonesia and the Philippines agreed to bolster cooperation in energy and security. Widodo and Philippines’ President Ferdinand Marcos Jr. witnessed the signing of a memorandum of understanding to deepen bilateral relations on energy. The Philippines gets the bulk of its imported coal from Indonesia, and in 2023 Manila received assurance from Jakarta concerning steady access to the commodity. Indonesia also pushed for improvements in border security cooperation, as well as the settlement of continental shelf boundaries. Widodo also pitched to sell anti-submarine warfare aircraft from Indonesia to the Philippine Navy.

Per capita income in Cambodia expected to exceed US$2000 in 2024
(08 January 2024) Cambodia’s per capita income is expected to exceed US$2,000 in 2024, marking an increase of over 8% compared to 2023. Economic growth is expected to reach about 6.6%, with the GDP to reach US$34.92 billion. GDP per capita is anticipated to rise to US$2,071 in 2024, up from US$1,917 in 2023 and US$1,784 in 2022. Experts have noted that Cambodia’s exports to international markets in the past year have shown positive trends despite a sluggish global economy. The Cambodian government is aiming for the country to reach upper-middle-income status by 2030, laying the foundations for it to become a high-income economy by 2050.

RCEP Monitor

Japanese seafood companies seeking to process scallops in Viet Nam after China ban
(06 January 2024) Japanese seafood companies are seeking to process scallops from Hokkaido in Viet Nam in response to China’s recent ban on Japanese seafood imports. Japanese seafood retailer Foodison is partnering with companies including wholesaler Ebisu Shokai and trading houses Ocean Road and Nosui in an arrangement in which scallops from Ebisu are to be purchased by Ocean Road and exported to Viet Nam, where they will be processed and sent back to Japan to be sold to restaurants and retailers by Foodison, Ebisu and Nosui. A lack of manpower in Japan for processing has seen inventories of unprocessed scallops start to pile up after China (where scallops are traditionally sent for processing) imposed restrictions on Japanese seafood imports. These restrictions were in response to Japan releasing treated wastewater from the Fukushima Daiichi nuclear power plant.

Honda Motor mulling building electric vehicle plant in Canada
(07 January 2024) Japanese automobile maker Honda Motor is mulling building an electric vehicle plant in Canada, with the project to possibly include the in-house manufacture of batteries. Overall spending on the project could reach up to US$14 billion, making it one of Honda’s largest investments. Honda is currently exploring several sites for the new factory, next to an existing automobile factory in Ontario province. It expects to decide by the end of 2024, with the new facility to go onstream as early as 2028. In December 2023, Canada announced plans to effectively end sales of new passenger vehicles powered only by gasoline or diesel by 2035. Canada also has plentiful renewable energy sources, so its carbon footprint per unit of electricity generated is relatively low, making it an ideal site.

Consumer price indicators rises 4.3% year-on-year in November 2023
(10 January 2024) Australia’s consumer price indicators rose by 4.3% year-on-year in November 2023, lower than economists’ estimate of 4.4% and the smallest annual increase since January 2022. This the second straight month in which Australia’s monthly inflation gauge moderated. When excluding volatile items such as fuel, fruit and vegetables, and holiday travel, the annual rise was 4.8%, lower than October’s 5.1%. This slowdown further bolsters the case for the Reserve Bank of Australia (RBA) to hold rates steady during its next policy decision in February 2024. The RBA has taken its key rate to a 12-year high of 4.35% in an effort to bring inflation down to within its 2% to 3% target band.

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