Tax revenues fall by more than a third under the coup regime

Myanmar’s military junta has collected far fewer taxes than its ousted civilian predecessor, according to the country’s latest Internal Revenue Department (IRD) annual report.

The report for the fiscal year ending September 30, which includes the first eight months of the coup regime, says total tax revenue fell 35% last year from the previous year.

In fiscal year 2020-2021, the IRD was able to collect 4.745 billion kyat ($ 2.657 billion) in revenue, according to the report, compared to 7.296 billion kyat ($ 4.086 billion) reported during 2019-2020 fiscal year.

According to IRD records, the drop affected all categories, including income taxes, trade taxes, special commodity taxes, stamp duties, lotteries and jewelry taxes. .

In an apparent attempt to increase revenue, the junta introduced new taxes on internet services within a week of the report’s release, including a 20,000 kyat ($ 11) trade tax on SIM cards that previously did not cost only 1,000 kyat plus a 15% service tax.

“The fact that they started the year with an amendment to the Union tax law shows how desperate and incompetent they are when it comes to finances,” said Tin Tun Naing, finance minister of the shadow government of national unity (NUG). pointed out when asked about the move.

The new taxes, which the regime said were aimed at reducing damage to young people from “internet overuse”, are primarily aimed at controlling the flow of information, he added.

Since taking power last February, the regime has encountered resistance on many fronts, including from consumers who have refused to pay their electricity bills or buy lottery tickets.

In November, the junta used the threat of force against citizens reluctant to hand over their money to the state-owned Electric Power Corporation, a frequent target of guerrilla groups operating in cities across the country.

This effort may have had the desired effect, but getting people to buy more lottery tickets has proven to be more difficult.

Four months ago, the regime announced plans to award 70% of national lottery profits to winners, down from 60% previously.

Despite this, however, ticket sales continued to decline, meaning that the top prize, which reached 1.5 billion kyat ($ 840,000) in the past, fell to just 500 million ($ 280,000). ).

One of the reasons for this failure may be the fact that no winner has been announced in recent months, which suggests that the junta has not paid out any of its lottery winnings.

Another factor is probably NUG’s launch of its own lottery. Created to help cover the cost of supporting public officials participating in the civil disobedience movement, the Nway Oo (Spring) Lottery has been a hit with the general public.

“Nowadays, no one buys tickets for the army-controlled lottery. Most lottery shops are now closed. One of them reopened on 78th Street last month, but they’re not getting any deals, ”a woman who lives in Mandalay told Myanmar Now.

It cost the regime dearly. According to the IRD report, the national lottery only brought in 86 billion kyat ($ 48 million) last year, compared to 160 billion kyat ($ 89.6 million) it generated under the old government.

Despite these setbacks, the director general of the IRD, Min Htut, specifies in the introduction of the report that the total amount raised in taxes represents 92% of the figure targeted for last year.

According to the budget for 2019-2020, the Central Bank and other public banks cover 50% of all public expenditure, while 32% comes from taxes, 13% from “miscellaneous sources” and 5% from commercial organizations owned by the state. .

The military, which also has its own sources of revenue, received a declining share of the national budget under the previous government, but this trend has likely been reversed since last year’s coup.

NUG sought to deprive the regime of taxes and international aid, while ordinary citizens boycotted products made by military-owned conglomerates.

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