(Radio Australia) The poorest people in Burma are paying more than half their income in taxes.
The Network for Human Rights Documentation-Burma says junta members and their cronies spend more than 50 percent of the national budget on the military but less than 1.3 percent on health and education. The report says Burma's tax system lacks transparency and accountability with payments often arbitrary and made to local military and officials in cash or by forced labour.
Presenter: Ron Corben
Speakers: Cheery Zahau, Human Rights Education Institute of Burma; Dr Alison Vicary, Macquarie University's Burma Economic Watch
CORBEN: The report was based on interviews with over 340 people across Burma and noted how the government and military arbitrarily collected taxes in the form of cash, land, goods and forced labour. People were also being charged arbitrary fees at checkpoints, as well as having to make forced donations for festivals, school buildings, school registration and equipment.
I asked Cheery Zahau from the Human Rights Education Institute of Burma how these methods of taxation impacted the wider society in Burma.
ZAHAU: The most critical part is accountability and transparency of the government towards the people and in terms of taxation. And we learnt that people don't know about tax and people don't know they are being taxed through their labours and through their land. So accountability and transparency within this administration is very worrying, very corrupt. It adds problems to their basic survival; they can't send their children to school, cannot save money, they don't have enough money for hospitals for health care anymore.
CORBEN: The report says Burma's public accounts are seen as inadequate. Reported government spending on the military is said to account for over 50 per cent of the national budget. In contrast, just meagre provisions are made in areas such as health and social welfare.
Dr Alison Vicary is an economist at Macquarie University's Burma Economic Watch.
VICARY: The problems with the system of taxation we need to say that the system of taxation is oppressive and has no legitimacy; is that the agencies collecting taxes are actively involved in the control and suppression of the population. So this is why with this appropriation of resources by the state from the private sector is actively involved in violence and human rights abuses.
CORBEN: How much of the real taxation that we know of is genuinely going back into areas such as education such as health?
VICARY: What it does appear from the report that much of the taxation that is collected at the local level is going towards the incomes of the local officials, rather to the central government. The official data on taxation from the central government budget is only available for the last few years and it suggests it is increasing but it is a very, very low percentage of GDP.
CORBEN: Are there any indications that the increased trend in taxation is related in any way to the state of the economy?
VICARY: This is one of the issues. Certainly the increase in taxation I would argue is partly responsible for the deterioration in the economy particularly in the rural areas. And also as the soldiers and the ceasefire groups have limited business opportunities that would provide them with an incentive to I guess appropriate resources from local people.
CORBEN: Dr Vicary says Burma's economy is a "militarized state". Major resources are controlled by the armed forces with senior officials overseeing control or influence of the private sector. The military has ruled Myanmar since 1962. The generals initially applied a 'Burmese way to socialism' that impoverished the country. Some economic reforms took place in the late 1980s and 1990s. But largely major business remains under military's control. The legacy of mismanagement has left millions in poverty requiring years before recovery, says Dr Vicary.
VICARY: This is the problem - is one of the biggest damages that this government has done - it that it's impoverished people for several generations and for several generations into the future because the damage that's been done. Burma's now so poor - that it's going to take a long time to right the economic problems that the regime has caused.
FOR CONNECT ASIA THIS IS RON CORBEN IN BANGKOK