The Cost of War and Taxes

Myanmar Spring Chronicle – October 18

(MoeMaKa) October 19, 2024

The Cost of War and Taxes

As Myanmar enters three and a half years of renewed armed conflict, armed groups have been forced to find various ways to finance their war efforts. Primarily, this has involved imposing taxes on residents, trade, and commerce, as well as extracting and selling natural resources. In some cases, these taxes are collected from both legal and illegal goods. Since victory in the war is their top priority, they often have to overlook legalities, sometimes even resorting to revenue from drug trafficking and human trafficking, making it difficult to maintain ethical operations.

The military junta, occupying the position of the government, benefits from its ability to collect taxes from various sources, including natural resources and other sectors. Ethnic armed groups, the PDF under the NUG, and local LPDF groups, on the other hand, rely on donations, collecting household taxes in towns and villages, taxing natural resources from controlled areas, and charging checkpoint fees along roads to sustain their operations and cover the cost of war.

Myanmar is rich in natural resources such as gold, jade, rubies, and sapphires, with armed groups in control of these areas collecting taxes. Additionally, timber production is taxed in forested regions. During periods of peace, a substantial amount of revenue also came from oil fields, and although there has been destruction and conflict post-coup, production continues to some extent.

The military junta, which claims to be the government, is marred by widespread corruption, with officials exploiting their positions for personal gain. Some armed groups have also been found to collect exorbitant checkpoint fees along both road and water routes under their control.

In some regions, both the military and opposing forces, including ethnic armed organizations (EAOs) and the PDF, are collecting tolls along major roads, with checkpoints sometimes located within sight of each other. This can be seen in areas like the roads in Sagaing Region, the Mandalay-Myitkyina road connecting Kachin State and central Myanmar, and roads connecting various regions such as Monywa-Gangaw-Hakha, Kale-Tedim, and Karen State’s Hpa-An-Myawaddy road. Similar conditions are reported in Mon State, Tanintharyi Region, and Shan North.

In Rakhine State and northern Shan State, areas controlled by ethnic armed groups like those involved in the 1027 operations have seen the military blocking supplies like food, medicine, and fuel, making life difficult for the local population, who must buy goods at significantly inflated prices to survive.

In this environment, the general public faces the burden of both military corruption and the varying tax rates imposed by EAO, PDF, and LPDF groups. The inconsistency in tax rates and the numerous checkpoints drive up transportation costs, with reports suggesting that transporting goods along certain routes costs unheard-of amounts. For example, checkpoint fees for a truck on the short 100-mile Hpa-An to Myawaddy road can exceed 5 million kyat, and smaller vehicles can face costs of around 1 million kyat. Passenger fares along the same road have reached as high as 70,000 to 100,000 kyat per person.

It’s reported that up to four armed groups, including the military, collect these fees along this short stretch, significantly contributing to skyrocketing prices. Over the past three and a half years, those supporting the Spring Revolution have raised funds for arms, ammunition, food, and medical supplies for the armed groups. However, with donations falling short, checkpoints have become an additional source of revenue.

If there were more coordination between the various groups regarding tax collection, or systems in place to avoid double taxation, the public might be somewhat relieved of the overwhelming burden of rising prices. However, amid ongoing conflict and economic strain, people are struggling to make a living and cannot bear the heavy burden of these taxes. While it’s unrealistic to expect good governance in times of war, it’s essential for armed groups to understand the public’s growing inability to cope with these pressures.

Leave a Reply

Your email address will not be published. Required fields are marked *

Time limit is exhausted. Please reload the CAPTCHA.

This site uses Akismet to reduce spam. Learn how your comment data is processed.