doing business in myanmar – what you need to know as a singaporean
Next year’s budget deficit is expected to be K7 trillion (US$4.5 billion) as the government plans to spend more in an effort to fulfil more of the public’s urgent needs, said President Win Myint.
He made the comment at a National Planning Commission meeting and Finance Commission meeting for fiscal 2019-20 in Nay Pyi Taw on Tuesday.
The government plans to implement projects that would have immediate public benefits next year, he told the National Planning Commission meeting.
“As State Counsellor Daw Aung San Suu Kyi has stated, the country will not develop unless there is peace and stability, so all projects need to aim for these goals and meet the public’s needs,” U Win Myint said.
HE said Myanmar’s GDP is expected to increase by 7 percent due to more electricity generation next year, fewer summer blackouts, better roads, more financial services, more local and foreign investors, and improvements in tourism. An estimated GDP was not released.
This will be the current government’s fourth budget, so its implementation should be optimised by reviewing the successes and failures of previous years, U Win Myint told the Finance Commission. More money should be spent on bringing immediate benefits to the public, like electrification, road and bridge construction, health care, education and social security.
Therefore, the budget deficit is expected to be high next year. In previous years, the fiscal deficit was kept below 5pc of GDP – as suggested by the World Bank and IMF – but it will be an estimated 5.9pc next year.
However, there is no risk of the government being unable to implement the projects, said Daw Thet Thet Khaing, a member of the Pyithu Hluttaw’s (Lower House) Banking and Monetary Affairs Development Committee.
The ministries cannot implement the projects in full during the coming fiscal year, so they will have to return the estimated expenses, as they cannot use them in time. The government needn’t be worried about this estimation, because the ministries are weak in implementing the projects, she said.
Starting in the next fiscal year, the fund accounts of state-owned economic enterprises will be combined, as urged by the hluttaw. The Union Fund Account – Other Account will become part of the Union Fund Account – State-owned Economic Enterprise Account.
They will have to pay taxes on profits, the rest will have to be given to the Union, and Other Accounts will be terminated after auditing them, said Vice President Myint Swe.
Daw Thet Thet Khaing supported abolishing Other Accounts, saying she had proposed adding them to the national budget.
She said there needs to be a law requiring sound financial practices at state-owned enterprises.
The Model for Emergency Funding will also see some changes. The government had allocated K100 billion for the fund in the past, but next year, only K50 billion will be set aside. Ministries, and regional and state governments will receive the remaining K50 billion. The aim is to prepare better for and react faster to natural disasters, said U Myint Swe.
Regional and state governments have an estimated K1.2 trillion for next fiscal year. As the estimated total expense is K3.3 trillion, the deficit will be K 2.1 trillion. The Myanmar government will provide the deficit. Myanmar has provided K1.79 trillion for fiscal 2018-2019, which will increase by K320 billion next year, said Vice President Henry Van Thio.
During a visit to states and regions, he urged officials to spend more regional development funds and cut expenses on offices, guest houses, and vehicles. He also urged them to carry out all government projects transparently.
The government expects to earn K25.31 trillion in revenue next fiscal year, and has budgeted K32.34 trillion for expenses, leaving an estimated deficit of K7.03 trillion.
Based on this deficit, GDP would be an estimated K120 trillion.
Source: Myanmar Times
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