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Bago Region’s tax revenue relies on excise, fishery and property taxes

Bago Region relies heavily on excise, fishery and property taxes as regional tax revenue, while its construction ministry spends 39 percent of the budget, mainly on road improvement.

Bago government revenues have increased more than 150pc since 2013 while the grant transfer from the Union government to the region has grown more than 290pc in the same period, according to the Citizen’s Budget released by the Bago regional government. Excise, fishery and property taxes make up for 83pc of the regional tax revenue in this fiscal year.

The Bago Region government launched its first Citizen’s Budget on Monday with the support of the US-headquartered Asia Foundation (TAF) and Renaissance Institute, a domestic NGO. Officials, regional legislators, civil society organisations heard from and interacted with the chief minister, deputy budget director and the speaker on the contents of the Citizen’s Budget for the 2017-18 fiscal year. Citizen’s Budgets communicate budget information to the general public with the aim of increasing budget transparency and encouraging civic engagement with the budget process. Bago’s budget covers a wide range of issues, including the breakdown of available revenue and expenditure and where taxes are spent. Bago Region is the second state in Myanmar to launch the regional Citizen’s Budget, after Tanintharyi.

U Win Thein, Bago Region Chief Minister, stated that the Citizen’s Budget is a step forward to increase transparency as well as accountability, and to encourage civic participation in public financial management.

“Government budgets, particularly at the sub-national level, are central to social and economic development, and in order to be effective, require strong public financial management,” he said.

He said the budget will help create a cycle in which the government provides services based on the needs and inputs of the constituents.

“The resulting alignment between public resources and public needs will ultimately lead to the greater growth and development of the Bago Region and its people,” he said.

Dr Kim NB Ninh, TAF’s Myanmar country representative, said in her opening remarks that the budget allows regional governments to communicate their proposals and public finances with their citizens. This vital form of communications between the administration and the people helps build trust, develop a more informed public and ultimately a stronger democracy.

“This was a time where the budget belonged to the state, but things have changed.

“Citizen’s Budget is a two-way conversation between the state and the public,” she noted.

Similarly, Ildrim Valley from the Renaissance Institute told The Myanmar Times that citizen’s budgets are platforms for interaction between governments and citizens. To that end, governments should continue to look for ways to engage the public in the budgeting process.

“This launch has, in some ways, set precedent in Myanmar and provides a reference point from which the Bago government can learn and move forward in how it communicates budget information and engages its constituents,” he said, adding that since not all sub-national governments in Myanmar publish Citizen’s Budgets, there is an opportunity for states and regions to learn from each other in how they communicate with citizens.

Daw Khin Marlar Kyaw, from the CSO Human Rights Defender, said it’s the first time CSOs in the region has access to how the taxpayers’ money is spent..

Some of the highlights of Bago’s latest budget are below.

Revenue

The Bago regional government has K158,057 million to spend for the fiscal year 2017-18, K158,057 million (81pc) of which comes from fiscal transfer allocated by the central government.

Figure 1 illustrates how the regional government gets its money: 2pc from parliamentary transfer, 3pc from regional taxes, 81pc from grant transfer from Nay Pyi Taw and 14pc are regional non-tax revenues such as licence fees and fines.

The grant transfer from the Union government has increased more than 290pc since 2013. (See figure 2)

The budget reveals that the region’s taxes come primarily from seven sources collected by four departments. Excise tax, land tax, embankment tax and tax on mineral extraction are collected by the general administration department (GAD) and make up about 52pc of the tax collection. Excise tax, in particular, is responsible for 44pc of the regional taxes. Other taxes include fishery tax and forestry product tax.

DAOs (development affairs organisations), which manage municipal services, collect 21pc of the taxes. Almost three quarters of DAO-collected taxes come from property tax, which is a payment urban residents make for municipal services.

Expenditure

Meanwhile, Bago Region’s government expenditure has more than doubled since 2013. It is projected to spend K158,057 million for 2017-18 fiscal year. Construction ministry is expected to share the largest portion of the total expenditure (39pc), followed by regional administrative bodies (22pc). DAOs account for 12pc while the home affairs ministry is estimated to spend 10pc. Electricity distribution enterprise and agriculture ministry are each projected to spend 6pc.

The Asia Foundation and the Renaissance Institute have an ongoing partnership with four states and regions to support the development of public financial management. TAF’s work is funded by the UK Department of International Development (DFID), Australia’s Department of Foreign Affairs and Trade (DFAT), and the Swiss Agency for Development and Cooperation (SDC).

Source : Myanmar Times

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