Taxation and income distribution in Myanmar: Application of a new computable general equilibrium (CGE) model

Despite major public finance reform efforts over the last decade, Myanmarese finances continue to be characterized by relative weakness in revenue collection, budget execution, and long-term sustainability. Myanmar is therefore need of comprehensive reform. Two top priorities Sustainable Development Plan are establish a fair efficient tax system increase government revenues, ensure effective financial management. In this paper, we analyse scope for fiscal future Union deficits lower central bank financing. Specifically, employ newly developed dynamically recursive computable general equilibrium model economic efficiency household income distribution impacts employing four instruments, including expansion existing commercial taxes, customs duties, corporate introduction new secondary tertiary education payroll 2022–40 deficits. Our results demonstrate that eliminating could release savings capital accumulation lead net present value GDP gains, regardless instrument, but also real welfare losses will substantial potentially persist throughout our 20-year horizon. While enterprise instruments identified as progressive, they likely suffer from weak bases, implying commodity-focused sales taxes progressive less import tariffs, form core any Myanmar.