Burma’s tax system is a giant extortion racket, report shows

Thursday, 02 September 2010 02:15 Thomas Maung Shwe

Chiang Mai (Mizzima) – Burma’s tax system is part of a giant kleptocracy by which the Burmese military regime arbitrarily demands “money, land, goods and labour in the name of taxation”, a report released yesterday by a rights monitor based in Thailand says.

In the word’s of the report compiled by the Network for Human Rights Documentation – Burma (ND-Burma), the military regime has “transformed taxation from a routine and legitimate function of government into extortion and a tool of repression”.

Lead writer and researcher on the report was Dr. Alison Vicary of Burma Economic Watch at Macquarie University, Australia.

In Burma, it was common for subsistence farmers to have more than 50 per cent of their crops taken as a form of taxation or fees, literally feeding the machinery of the military regime that oppresses them, the report says.

The grim report titled “We have to give them so much that our stomachs are empty of food: The Hidden Impact of Burma’s Arbitrary & Corrupt Taxation” is a yet one more reminder of the extent to which Burma’s military authorities inflict great suffering on the population over which they rule.

Among the findings of the report is that: “There is a correlation between presence of soldiers and the level of taxation and the amount of resources taken from the people.”

The report described this as a result of the Burmese regime’s policy of limiting the funding from the national budget of armed forces personnel. Left without adequate food or wages, junta soldiers are instead compelled to extort money from local populations and small business owners.

Checkpoints manned by soldiers, ostensibly established for security reasons, operate as tollbooths, charging everyday Burmese a high proportion of their income for the privilege of walking down a road that months earlier they had to “donate” their labour to rebuild.

The military however is not the only government entity taking payments. According to the report, increasingly in Burma everyday interactions with any representatives of the state are excuses to charge fees; funds the average person in Burma can hardly afford.

The report notes that Burma’s abysmal education system – where teachers’ salaries are far below the cost of living – is plagued by both official and unofficial fees. The report quotes a parent interviewed by the Palaung Women’s Organisation for its 2009 report, “Taxation for education in Nam Kham Township” Shan State, described one of the common predicaments:

“When my child has to attend 5th standard, he has to go to another school, and I have to give them the school transfer document fee [of] 2,500 kyat, and the school fee for 5th standard [of] 9,000 kyat, and the exercise book fee of 1,500 kyat, and we have to buy more exercise books from the school as they couldn’t sell all [their] books (1,700 kyat), and we have to give for the stationery fee, the textbook fee and they are much higher than the private shops. I have to spend a lot of money for those fees, so, I have decided to drop out my child from the school and send him to go to work the rubber fields with his elder sister. His elder sister has already had to drop out from school when she was at 7th standard.”


The report also details the unbelievably arbitrary nature of Burma’s tax system. One noteworthy example occurred in Kachin state in 2008. Phone users in Myitkyina Township, the capital of northern Kachin State, whose numbers started with 25, were forced to pay 550,000 kyat to have their phone service restored when an unexplained problem occurred with their prefix.

Other absurd examples of revenue collection described include a tax in Karen State imposed by the regime-backed Myanmar Woman’s Affairs Federation targetting girls. The tax launched statewide in 2007 levied a 1,000-kyat fee on every household with a daughter.

As previous Burma observers have also noted, the report found that “taxes and other revenue are not used to produce goods and services desired and required by the people of Burma. Instead tax revenue that reaches the central budget is mostly allocated to the military and its supporting structures.”

The report also concluded that the military’s commandeering of as much as half of the annual national budget has severely affected national development and harmed economic growth.

The report consisted of 342 interviews conducted by field researchers and nine longer interviews done by the report’s main author. Around 85 per cent of the incidents of taxation described in the report occurred between 2008 and this year.