Tax revenue key to addressing budget deficits, say experts

From left: Mr Tauhid Farid, ActionAid Myanmar; Mr Upendranadh Choragudi, project manager, Promoting Just and Democratic Governance, ActionAid Myanmar; U Than Lwin, senior advisor, KBZ Bank; U Zaw Pe Win, principal, Human Development Institute; Mr Shihab Uddin Ahamad, country director, ActionAid Myanmar; U Hnin Oo, senior vice president, Myanmar Fisheries Federation; and U Soe Myint, Editor-in-Chief, Mizzima Media Group. Photo: Hong Sar/Mizzima

The government needs to adopt sound and appropriate policies to generate more tax revenue for the national budget, experts said at a workshop in Yangon on March 6.

The workshop was organised by the Union of Myanmar Federation of Chambers of Commerce and Industry and Action Aid Myanmar to enable lawmakers, economists, civic groups and other stakeholders to share ideas about the 2015-2016 budget, that will soon be debated in the Union parliament.

The use of a budget for national development relied on revenue earned from government enterprises and taxes on businesses, commercial transactions and individuals, participants were told at the workshop.

The workshop, the third such event held to promote transparency and public awareness about the budget process, heard that business policies needed to be improved for the country to create more tax revenue.

“Tax revenue plays a key role in budget allocations,” economist U Saw Naing told the workshop.

“The businesses of local entrepreneurs are fundamental for increasing revenue and polices on business play an important role in this issue,” he said.

U Saw Naing also said it was important that taxes be collected in border areas as well as big cities but acknowledged that cost issues were involved.

“For example, they may need to spend K1.2 million to go to border areas and collect taxes of K1 million,” he said.

“Moreover, only if the businesses of the national ethnic people are good will they be able to pay taxes,” he said.

The pre-budget consultation in session. Photo: Hong Sar
The pre-budget consultation in session. Photo: Hong Sar 

Myanmar Fisheries Federation vice president U Hnin Oo said that although the government had made political reforms, the production sector had declined.

The country had not managed to promote the domestic production sector that was essential to generate more tax revenue, he said.

A systematic approach was needed to earn more revenue from the agricultural, livestock and industrial sectors, said U Hnin Oo, adding that policies were needed to improve the business environment for domestic companies so they could contribute more tax revenue.

He expressed concern about the “many difficulties” involved in establishing small and medium-sized enterprises.

An Independent member of the Yangon Region Assembly, Dr Nyo Nyo Thin (Bahan, constituency 2), said that although most government enterprises were running at a loss, some ministries continued to seek budget allocations for their projects.

The workshop was told that for the period from the start of the current fiscal year last April 1 to February 27, Myanmar’s total trade volume was US$25,172 million but a weak export sector – except for natural resources – had resulted in a trade deficit of nearly $5,000 million.

A senior consultant to Kanbawza Bank, U Than Lwin, outlined possible direct and indirect affects on citizens of government measures to deal with a big budget deficit.

“If a budget deficit is huge, the government needs to increase taxes and that will affect citizens,” said U Than Lwin, a former deputy chairman of the Central Bank.

“If the government does not get enough tax revenue, it can borrow from foreign countries but the money that the government will use to repay the loans will be taxes paid by citizens,” he said.

“If the government prints more currency to solve the problem, inflation will increase resulting in higher commodity prices that will affect the citizens,” U Than Lwin said.

This Article first appeared in the March 12, 2015 edition of Mizzima Weekly.

Mizzima Weekly is available in print in Yangon through Innwa Bookstore and through online subscription at  

This Article first appeared in the March 12, 2015 edition of Mizzima Weekly.

Mizzima Weekly is available in print in Yangon through Innwa Bookstore and through online subscription at  

- See more at:

More Articles