Ar 2015-2016

Mizzima Business Weekly - - AFFAIRS/ LAST WEEK IN NAY PYI TAW -

2016 tax year, this be­ing one of the high pro­file cases of tax col­lec­tion.

Sean Tur­nell, as­so­ciate pro­fes­sor at the Mac­quarie Uni­ver­sity in Australia, noted that tax col­lec­tion shouldn’t be the en­tire fo­cus:

“Notwith­stand­ing the in­creases [health and ed­u­ca­tion fund­ing] of a few years ago, Myan­mar re­mains the only coun­try in Southeast Asia, and amongst only a hand­ful in the world, that spends more on the mil­i­tary than on health and ed­u­ca­tion com­bined,” said Mr Tur­nell.

The coun­try’s high mil­i­tary spend­ing raises eye­brows. In the 2014-2015 fi­nan­cial year, the gov­ern­ment al­lo­cated 12% of the year’s bud­get on the mil­i­tary com­pared to 3% on health.

“High mil­i­tary spend­ing in Myan­mar, which has in­creased in ab­so­lute terms un­der the Thein Sein gov­ern­ment, ef­fec­tively ‘crowds out’ other, more so­cially pro­duc­tive gov­ern­ment spend­ing. It also puts Myan­mar’s fis­cal and mon­e­tary sys­tem un­der stress, and is at the heart of many of the coun­try’s macroe­co­nomic prob­lems,” said Mr Tur­nell.

In­fla­tion is a con­cern. Mr Tur­nell noted that the Cen­tral Bank is mind­ful of in­fla­tion and very much equipped to rein it in.

In a Fe­bru­ary press re­lease the IMF warned about the pos­si­bil­ity of a public ser­vice wage in­crease, ris­ing prop­erty costs and higher elec­tric­ity tar­iffs – all items that could lead to in­creased in­fla­tion.

The cur­rent in­fla­tion rate sits at 6.9% up from 6.6% in the pre­vi­ous fi­nan­cial year, ac­cord­ing to data from the World Bank web­site. In­fla­tion has been rel­a­tively sta­ble over the past five years, it’s low­est was 4.2% in 2012 and its high­est was 7.7% in 2010.

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