Crackdown on Zero-Dollar Tours in Myanmar

Myanmar, Yangon, zero-dollar tours, China

The government has instructed souvenir shops to transact with zero-dollar tourists in cash only, Yangon Region Hotels and Tourism Minister Daw Naw Pan Thuzar Myo said on December 16.

According to the daily Myanmar Times, the decision has been taken as zero-dollar tours are gaining pace, especially with the rise in Chinese tourists. Myanmar -and particularly Yangon which acts as a major destination for shopping- was visited by over 593,000 Chinese travellers from January to October 2019, according to the Ministry of Hotels and Tourism. This represents a growth of 161% over the same period of 2018.

Zero-dollar tourism involves Chinese tourists buying cheap tour packages from companies registered in the destination country but owned by Chinese nationals. These packages involve tightly planned itineraries to shops, hotels and restaurants connected to these Chinese tour operators. The rise in such activities prompted investigations at souvenir shops located in popular tourist areas of Yangon, where zero-dollar tourists usually frequent. Negotiations were also made with the relevant authorities to supervise and ensure commercial tax on sales is being paid, she added.

The Central Bank of Myanmar (CBM) has consequently instructed local shops to temporarily suspend digital payments on Alipay and WeChatPay, according to deputy minister of Hotel and Tourism U Tin Latt during a meeting on December 10. The CBM’s decision comes after it allowed WeChat to be used in limited areas under a trial period of six months this year.

“Myanmar is not ready for the digital currency system. There is law governing cybersecurity and digital currencies. The CBM is not yet technologically equipped to monitor digital transactions. So it will not be easy to manage online payments. As such, it has temporarily instructed transactions to be cash only,” Daw Naw Pan Thuzar said.

In 2020, the authorities will conduct spot checks on unlicensed tour agencies, tour guides, and zero-budget tour operators in Yangon Region to ensure compliance, she added. Due to the way in which these tours operate, the local economy does not benefit much and governments often lose out on tax revenue as payments are often routed through Chinese digital platforms and skirt taxes.

It is not sure that the measures will really be effective. Talking to the Myanmar Times, U Pann Min, a Chinese-speaking tour guide said that it will not be easy to control or prevent online payments. “ It is not easy to prevent zero-dollar tours’ clients from making online payments. As they are from the same country, they can make payments in many ways. It will be more effective if unannounced inspections can be made, and taxes are charged on outgoing goods by customs. Even if paid through vouchers, authorities could check if they are buying the items at the current prices,” he said to the newspaper.

From January to October, total international tourist air arrivals are up by 40% to 1,5 million according to the Ministry of Hotels and Tourism, boosted by Chinese numbers. South Korean arrivals are up by 71% while Japan tourist arrivals also jumped by 24%.