Myanmar’s military junta has collected significantly less in taxes than its ousted civilian predecessor, the latest annual report by the country’s Internal Revenue Department (IRD) has shown.
The report for the fiscal year ending on September 30, which includes the first eight months of the coup regime’s rule, indicates that total tax earnings dropped by 35% last year compared with the year before.
In fiscal year 2020-21, the IRD was able to collect 4.745 trillion kyat ($2.657 billion) in revenue, the report shows—down from 7.296 trillion kyat ($4.086 billion) reported in fiscal 2019-20.
According to the IRD’s records, the decline has been in every category, including income taxes, commercial taxes, special commodity taxes, stamp duties, lotteries, and jewelry taxes.
In an apparent bid to increase its revenue, the junta introduced new taxes on internet services within a week of the report’s release, including a 20,000 kyat ($11) commercial tax on SIM cards that previously cost just 1,000 kyat and a 15% service tax.
“The fact that they started the year with an amendment to the Union Tax Law shows just how desperate they are, and how inept they are in financial matters,” Tin Tun Naing, the finance minister for the shadow National Unity Government (NUG), remarked when asked about the move.
The new taxes, which the regime claimed were aimed at reducing harm to young people caused by “overuse of the internet,” are mostly about controlling the flow of information, he added.
Since seizing power last February, the regime has faced resistance on many fronts, including from consumers who have refused to pay their electricity bills or buy lottery tickets.
In November, the junta resorted to using threats of force against citizens reluctant to hand over their money to the state-run Electric Power Corporation—a frequent target of guerrilla groups operating in towns and cities around 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 the profits from the national lottery to prizewinners, up from the previous level of 60%.
Despite this, however, ticket sales have continued to slide, meaning that the top prize, which has gone as high as 1.5 billion kyat ($840,000) in the past, has fallen to just 500 million ($280,000).
One reason for this failure may be the fact that no winner has been announced in recent months, suggesting that the junta hasn’t paid out any of its lottery earnings.
The NUG’s launch of its own lottery is likely another factor. Created to help cover the cost of supporting civil servants taking part in the Civil Disobedience Movement, the Nway Oo (Spring) Lottery has been a hit with the general public.
“Nobody buys tickets for the military-controlled lottery these days. Most lottery shops are closed now. One reopened on 78th Street last month, but they’re not getting any business,” a woman who lives in Mandalay told Myanmar Now.
This has come at a significant cost to the regime. According to the IRD report, the national lottery brought in just 86 billion kyat ($48 million) last year, compared to the 160 billion kyat ($89.6 million) that it generated under the former government.
Despite these setbacks, the director general of the IRD, Min Htut, says in the introduction to the report that the total amount raised in taxes represents 92% of the targeted figure for last year.
According to the budget for 2019-20, the Central Bank and other state-owned banks cover 50% of all government spending, while 32% comes from taxes, 13% from “miscellaneous sources,” and 5% from state-owned commercial organizations.
The military, which also has its own sources of revenue, received a declining share of the national budget under the previous government, but that trend has likely been reversed since last year’s coup.
The NUG has sought to deprive the regime of taxes and international aid, while ordinary citizens have boycotted products made by military-owned conglomerates.
