Maung Maung Win Deputy Minister Ministry of Planning and Finance Myanmar. Tokyo, Japan 6 th June, 2017

Transcription

1 Maung Maung Win Deputy Minister Ministry of Planning and Finance Myanmar Tokyo, Japan 6 th June, 2017

2 Fiscal Policy and Its Objectives in Myanmar 12 Points of Economic Policy Macroeconomic Situation PFM Reform and Policy Achievements Ongoing Plans Challenges 2

3

4 FISCAL POLICY ( FY) Tax Policy Expenditure Policy To endeavour to fully collect the taxes in compliance with Tax Laws for the Union Government s tax revenue. To establish Tax system that is supportive, fair and consonant with Market economy To balance the National Economy for its longer term stability, consumption, investment and saving with Tax system. To Manage the Nation s Health, Wellbeing and Integrity with the Tax system To manage conservation and sustainability of natural resources with this tax system. To continue the increment of Health and Education budget To place priority on budget expenditure that has quick benefit to the people To be proper screening for recruitment system To implement the projects in priority To be carefully spend for procurement in line with laws, bylaw and regulations To prioritize the expenditure for rural development, electrification, drinking water and irrigates water. 4

5 OBJECTIVES OF FISCAL POLICY To take off the Economy in short term To obtain sustainable economic growth for long term To enhance investment To promote the basic infrastructure development To create job opportunities To enhance the living standards 5

6

7

8 Government s Economic Policies Vision To achieve inclusive and sustainable development Objectives To support national reconciliation and the emergence of a united federal democratic union To achieve balanced economic development across the States and Regions To create opportunities for the emergence of capable and skilled new generations for the benefit of the country To establish an economic system that can achieve and maintain positive development outcomes through the participation, innovation and efforts of all citizens 8

9 Government s Economic Policies Set 12 points of Economic Policy to develop national economy in which To be Transparent and effective PFM become the First Priority; 1. Expanding our financial resources through transparent and effective public financial management 2. Improving the operations of state-owned enterprises, and privatizing state-owned enterprises 3. Fostering the human capital 4. Prioritizing the rapid development of fundamental economic infrastructure 5. Creating employment opportunities for all citizens

10 Government s Economic Policies (Con t) 6. Establishing an economic model that balances agriculture and industry 7. Asserting the right of individuals, formulating specific policies to increase foreign investment; and strengthening property rights and the rule of law 8. Achieving financial stability 9. Building environmentally sustainable cities, upgrading public services and utilities, expanding public spaces, and making greater efforts to protect and conserve our cultural heritage 10. Establishing a fair and efficient tax system, and protecting individual rights and property rights 11. Establishing technical systems and procedures and the development of advanced technology 12. Identifying the changing and developing business environment both in ASEAN and beyond

11

12

13 Electronic & Energy % Planning and Finance % Defence Education 8.05% Transport and Telecommunicati on 4.29 % Agriculture and Irrigation 5.79 % CBM 1.52% SEEs (External) 5.63 % % Industry Home Affair 2.78 Construction 1.49 % Health & Sports % Others 2.40 % Forest Conservation 1.92%

14 (Actual) (Actual) (Actual) (PA) (RE) (BE) Health Education

15

16 Promoting Education & Health Spending Improving Social Sector Spending Emphasize on basic infrastructure needs such as building lands and road Adopting Urban Development Plans with people participatory system Tax Sharing to States and Regions: 2% of Stamp duty 5% of Individual Income tax 15% of Commercial tax 15% of Specific Goods tax Systematically grant allocation to States & Regions with six indicators Promoting Public Investment by enacting new Investment Law, attracting Foreign Direct Investment and updating regulating and lessening the tight procedures in order for doing business and creating Job Opportunities Conducting Financial Inclusion

17

18 BACKGROUND HISTORY OF PFM REFORM Initiated fiscal sector reform in accord with the Framework of Economic and Social Reform (FESR) Since 2011` Joined PEFA program for comprehensive review of PFM in 2012 Disseminated Public Financial Management Performance Report (PEFA Report) in May, World Bank Conducted Public Expenditure Review - 1 st Phase achieved preliminary findings for six areas (Macro Fiscal Context, Broad Revenue and Expenditure, Intergovernmental Fiscal Relation, Electric Power and Energy, Health, Education) - World Bank Cooperation with IMF for strengthening PFM System, for strengthening Treasury Function, and for analyzing Budget formulation. Organized PFM Sub-SWG under Public Administration Working Group among 17 SWGs (Nay Pyi Taw Accord) Established PFM Reform Strategy with respect to the findings of PEFA Report and PER Implemented the Myanmar Modernization of Public Finance

19 For Effective Budget Allocations, POLICY ACHIEVEMENTS Separate the consolidated State Fund Account into Union Fund Account and States/ Regions Fund Account since 2011 Practiced Medium Term Fiscal Framework (MTFF) since FY in order to improve budget formulation process year by year in accord with the international standard to support macroeconomic stability and development Allocate more expenditure to Social Sector Budget (Such as Education & Health) by setting up the top policy among Expenditure Policies,with respect to prioritized areas of the country, Provided subsidies and fiscal transfers to the States/Regions, with the practices of MTFF according to the six specific economic indicators; Total population Poverty index Per capita GDP Area Urban population as percent of total state population Per capita tax collection Developed a system of top-down budgeting and bottom-up planning Formulated budget policy and fiscal policy functions and needed capacity Improved fiscal decentralization Improved fiscal transparency (Published Enacted Budget Law in newspaper and Ministry s Website, Published Citizen s Budget started from Fiscal Year Issued the Updated Financial Rules and Regulation

20 POLICY ACHIEVEMENTS (CON T) For Taxation, Conducted Tax Policy and Tax Administration Reform Prepared Tax Administration Procedure Law (TAPL) Established Large Taxpayer Office (LTO) and Medium Taxpayer Office (MTO 1, 2 & 3) Transformed Official Assessment System (OAS) into Self Assessment System (SAS) and Started to practice at LTO and MTO 1 Identified Specific Goods Tax on alcohol, tobacco, gems, oil, ga and some wood products and Enacted Specific Goods Tax Law in 2015 Changed Commercial Tax to Value added tax and special commercial tax Updated the information technology system Procurement Integrated Tax Administration System (ITAS) Software, Mini Data Center and IT Equipment Increased Tax to GDP ratio year by year

21

22 To have fundamental role in promoting economic development and providing public services to its citizens. To b

23 Continue tax administration and policy reforms rolling out SAS to MTOs and developing a Tax Administration Procedures Law Enhancing Tax to GDP ratio from 6.2 percent in FY 2012/13 to over 10 percent by FY 2018/19 : increasing tax collections from large taxpayers by strengthening tax administration Reviewing and Revising the existing taxation laws and enacting new laws in accordance with fiscal policy, Centralizing processing, taxpayers services and telephone management across large and medium taxpayers and installation of required IT software. Promoting the standard of auditing by using Computer Assisted Audit Technique, enhancing capacity of the staff by organizing trainings on local and international auditing Implementing e-lottery System Establishing Small Taxpayer Office

24 Developing more comprehensive ways to integrate Plan and Budget (current and capital budgeting process) To enhance Budget Creditability : out-turn compared to original approved Making an effort to reduce supplementary budget request system and to exercise yearly estimate To achieve fiscal transparency in line with global good practice by Preparing to publish eight key documents with comprehensive reliable information to enhance the level of Fiscal Transparency year by year in timely manner Reviewing the role of State-owned enterprises in budget in order to enhance level of fiscal transparency of state-owned enterprises Disseminating PFM Law and Establishing PFM Academy

25

26 Lack of Capacity and Systematic Mechanisms of how to use fiscal policy to make growth more inclusive while maintaining fiscal sustainability Tax to GDP ratio is still low comparing with the Asian Countries. Need to enhance the levels of compliance Need to review and update the existing tax systems, procedures and approaches High Cost of Tax collection (0.3%) (limitation) Need to develop a better management system to enhance the Tax to GDP ratio from 6.2 percent in FY 2012/13 to over 10 percent by FY 2018/19 including increasing tax collections from large taxpayers by strengthening tax administration (including Tax revenue from Natural resources sector) Need to develop a monitoring framework to support more comprehensive revenue and expenditure allocation and integrated recurrent and capital budget process by policy priorities Need to make used of public resources efficient and have public service deliveries Effective Management Framework for Capacity Building Need to developing systematic intergovernmental fiscal management to States and Regions IT infrastructure and IT systems are still inadequate.

27