From Paper to Platforms: Tax Collection in Myanmar

November 29, 2017

By Indu Nandakumar

The International Monetary Fund forecast this month that Myanmar’s economy would rebound to 6.7 percent this year—surpassing many of its neighbors in growth. Among the National League for Democracy-led government’s economic priorities is broadening its revenue base through improved tax collection. For a cash-based country accustomed to backchannel exchanges that has continued to decentralize, reforming the tax collection process is a challenge, to put it mildly. However, examples of technology applications removing some barriers to revenue collection are emerging, particularly at the municipal level.

The Myankhon app allows municipal staff to review and input tax data in real time, digitize tax records, and generate tax bills.

Take the city of Taunggyi, the capital of Shan State in Myanmar, where The Asia Foundation is helping to pilot a new mobile app called Myankhon developed by the Yangon-based social enterprise Koe Koe Tech. For the first time, Myankhon allows municipal staff to review and input tax data in real time, digitize tax records, and generate tax bills. Before the app, property tax collection in Taunggyi took nearly six months to finish, with tax collectors at the township Development Affairs Organization (DAO), Myanmar’s municipal authorities, stamping nearly 25,000 forms. Since they started using the app in October 2016, this bi-annual exercise now takes two months and there is barely any paperwork: tax collectors now use an internal mobile application that manages tax records digitally, prints tax receipts, and inserts electronic signatures with a single click.

Since 2011, Myanmar’s government has been undertaking an ambitious reform program that has reconfigured local governance institutions across the country. DAOs, which have the mandate to deliver a range of social and economic services in townships, were the only government agencies to come under the full control of the state and region governments in 2011 and no longer have a direct connection with the capital, Nay Pyi Taw. In addition, each state and region parliament enacted development affairs laws to define municipal governance for their respective areas. Yet, despite these efforts, DAOs face many challenges—from lacking revenues due to an outdated revenue management system to low levels of citizen trust in their services. DAOs are required to generate their own source of revenues to finance their services, but are currently over-reliant on non-tax revenue such as license fees due to the low tax base.

Township staff use Myankhon. Before the app, property tax collection in Taunggyi took nearly six months to finish, not it takes two months with barely any paperwork.

By streamlining the municipal tax collection process, Myankhon is a promising solution to these challenges. The application, which is now being used in five DAOs, can also be used to collect water fees and business licenses electronically and features analytics that allow DAO staff to monitor the performance of tax collectors and forecast revenues. The technology allows Taunggyi DAO staff to monitor consumer water meters and collect the fee based on water consumption as opposed to collecting water fees based on the flat rate of MMK2,000 (about $1.50) under the previous system. In Kayin State, the DAO in Hpa-an is using Myankhon to streamline user fees and business license fees, and will soon be utilizing the app for market licenses.

Digitized response to policy problems

The outcome of utilizing Myankhon is a more efficient and transparent revenue collection system in which tax records are routinely updated and reliable. Tax collectors are no longer required to manually calculate tax or migrate data from one form to another, thereby reducing the likelihood of human errors and freeing up time for DAO staff to focus on service delivery. In addition, tax collection and demand lists are now populated into the internal web application automatically, allowing improved reporting and analysis of tax collection and revenue.

Certainly, technology alone cannot solve the country’s policy problems, but the transition from paper to technology-based platforms could have far-reaching implications for transparency and productivity. The Myankhon can become a digital cadaster of properties that gives all its users access to the same information and allows a more effective analysis of the data, thus enabling the municipal staff to fundamentally rethink not only how they work but how they interact with public and implement policy reforms. More importantly, it presents an opportunity to address the low level of trust between the state and citizens as part of Myanmar’s democratic transition.

The Myankhon app is supported by the United Kingdom’s Department for International Development (DFID), Australia’s Department of Foreign Affairs and Trade (DFAT), and the Swiss Development Cooperation (SDC).

Indu Nandakumar is the communications officer for The Asia Foundation in Myanmar. The views and opinions expressed here are those of the author and not those of The Asia Foundation or its funders.

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