AN economist from the Yangon Institute of Economics has said people in Myanmar need to become more aware of the importance of paying taxes to help the government improve infrastructure such as roads and bridges throughout the country.

Dr Maung Maung Soe, an associate professor at the institute, said that both taxpayers and collectors need a better understanding of what taxes are and how revenue generated through taxation is of benefit to the whole country.

An informal survey of businesses in Yangon by The Myanmar Times revealed that many company owners felt that avoiding paying taxes was justified given the challenging business climate in Myanmar.

Most business owners also refused to divulge how much money they made every month.

Ko Aung Kyaw, who has worked as a business consultant for 10 years, said that despite their misgivings business owners should know and adhere to the country’s tax laws.

“Many businesses don’t pay their taxes. They think it’s a waste of money and have no incentive to pay it,” he said. “That might seem smart in the short run but eventually the government will catch up with them and then their business will suffer.”

“People need to understand that taxes contribute to the long-term development of the country but instead all they do is complain. They pay taxes and feel that their lives don’t improve,” he said.

Dr Maung Maung Soe said one of the aims of taxation was to help narrow the gap between the rich and poor.

“People cannot say that paying tax is not fair. The aim is to distribute the income from taxes equally so everyone benefits,” he said.

Ministry of Finance and Revenue figures show that the government made K440 billion (US$367 million) from taxes in the 2005-2006 financial year.

The Department of Internal Revenue under the ministry said the figure would have been much higher if so many companies and individuals had not avoided paying taxes they owed.

It said ineffectual tax collection measures were partly to blame for the low figure.

Dr Maung Maung Soe said the bigger problem is lack of understanding about the laws.

“Tax collectors need to explain about different kinds of taxes and tax payers need to enquire about what kinds of taxes need to be paid. The whole process should have transparency," he said.