Burma's tax regime ‘arbitrary, unjust’

Poor people are bearing the brunt of Burma’s arbitary and unjust taxation system, according to a damming report released on Wednesday.

The investigation by the Network for Documentation of Human Rights – Burma (ND Burma) used 342 respondents throughout the country, and highlights widespread unofficial taxation often by hungry, scavenging soldiers in war-torn ethnic areas.

More often than not the taxation is without any basis of means testing, leading to harsh difficulties for struggling families, as one prominent quote in the report notes: “We have to give them so much that our stomachs are empty of food”.

It further suggests that it is poorer people who often pay more in taxation: “People with a lower income and businesses with the smallest profit margins are effectively taxed at a higher rate.”

The report’s primary author, Dr Alison Vicary of the Maquarie Institute of Sydney, Australia, paints a catch-22 picture whereby the underdeveloped nature of the country makes proper census and records impossible, as does the multitude of ethnic wars. But without taxation, Burma cannot develop and build the institutions that provide civic services that citizens have a right to access.

The report was of a limited scope, because as ND-Burma management committee member Cheery Zahau told DVB, “The big cities have too many military intelligence” to complete comprehensive research. Moreover, many of the areas under ethnic armies were not examined, although the pro-government Democratic Karen Buddhist Army (DKBA) was mentioned numerous times regarding arbitrary taxation.

The research also found that minority groups like the Rohingya in Arakan state were more likely to pay higher taxes. “Ethnicity is one determinant of taxation levels, with businesses owned by Rohingya being subject to higher levels of taxation.

“People are being targeted because of their ethnic group, such as at checkpoints where being taxed or fined can depend on the personal and ethnic relationships of the persons in charge of the individual checkpoint”.

Overall the report confirms a portrait of a semi-medieval fiscal system whereby the appropriation of assets by military or the authorities is often not only monetary, but also land and livestock, with land confiscation being the most common form of non-monetary “taxation”. It’s a system that the report hastens to add goes against a raft of international treaties and norms.

The categorising and assimilating of populations into a system where taxes can be collected is one of the major challenges for any developing nation. Indeed many development economists see the ability of the populace to attain credit or have access to trustworthy financial services as one of the major hurdles of unleashing economic potential of an economy.

In much the same way, just taxation is requisite for the reliable functioning of an accountable public sector, and in both these areas trust is essential. The report found however that the Burmese military had “transformed taxation from a routine and legitimate function of government into extortion and a tool of repression”.

In any case, the primary findings of the report, regardless of bureaucracy, are that spending on the military and the military government’s priorities for the public sector are grossly imbalanced. It points out that the budget for health and education is amongst the lowest in the world, with a combined taking of only 1.3 percent of public spending.

While Burmese people are actively not allowed to have any say on taxation or government policy, “the public needs to be able to discuss taxation” Zahau says. The economic report is yet another forceful condemnation of military rule: “Unless there is demobilisation [of the military], there will still be problems” she adds.

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