There needs a lot of expenditures to be spent on the defence, security, law enforcement, administration, economic and social sectors for the development of a nation. In order to cover such a huge amount of money, a nation has to raise funds. Moreover, it also has to use its expenditures on respective sectors fairly and proportionately.

In the process, as regards collection of taxes and expending funds, respective nations practise various ways that conform with the economic, social affairs, cultural and traditions of the nation concerned.

A detailed basic principle has been adopted that “To submit to the Pyidaungsu Hluttaw the bill of Union budget containing the Union budget with the expenditures of Union territories, the distribution of appropriate funds from Union Fund Account to regions or states, the provision of funds as a special issue and loans permission; or the bill of financial allotment; to make suggestions on financial matters worth undertaking; and to carry out the duties assigned by the Pyidaungsu Hluttaw through the promulgation of law, the Financial Commission is to be formed with following persons:

(1) The President Chairman

(2) The Vice-President Vice-Chairman

(3) The Pyidaungsu Attorney-General Member

(4) The Pyidaungsu Auditor-General Member

(5) The Chief Ministers of Regions and States Member

(6) The Yangon City CouncilChairman Member

(7) The Pyidaungsu Minister for Finance Secretary

The Financial Commission will have to submit the bill of Union budget or the bill of financial allotment to the Pyidaungsu Hluttaw. Moreover, it will have to make suggestions on financial matters worth undertaking. Similarly, the matters prescribed by the Pyidaungsu Hluttaw will have to be tackled for the emergence of an enduring financial system.

There’s also a detailed basic principle that “The budgets of Union ministries and of organizations at Union level are to be checked under the aegis of a Vice-President nominated by the President of the State, and budget appropriations of Union ministries and organizations at Union level are to be submitted to the Financial Commission”.

The budgets of regions or states are also to be checked under the aegis of the other Vice-President nominated by the President of the State, and budget appropriations of the regions or states are to be submitted to the Financial Commission.

The Financial Commission will have to submit to the President the bill stipulating distribution of appropriate funds from Union Fund Account to regions or states, the provision of funds as a special issue, and loans permission. Here, a salient point is that the Financial Commission can seek advice from finance experts when necessary.

Then, in the formation of the Financial Commission region/state chief ministers have the rights to take part in the proceedings, and so they’ll have to submit matters on financial requirements of their regions and states.

The Financial Commission will be able to fulfil financial requirements and hold discussions on financial matters for the development of the entire Union, and regions and states. That represents essence of democracy and ensures equal opportunities.

On behalf of the Union government, the President of the State or the person to whom duties are assigned by the President of the State will have to submit the bill of the Union budget to the Pyidaungsu Hluttaw.

Then, the Pyidaungsu Hluttaw will have the rights to exercise in accordance with the majority consent the right to pass approval and to make rejection and deduction for other expenditures.

There’s been a detailed basic principle that the Pyidaungsu Hluttaw has the rights to hold discussions about expenditures stipulated in the bill of the Union budget to ensure smooth operation of the State’s administrative machinery and to avert delays and difficulties, but shall not allow to make rejection and pass approval with deduction. The expenditures are:

(1) Salary and allowance of heads and members of organizations set up according to the Constitution of the State and expenditures of those organizations at Union level;

(2) Debts the region has to settle, expenditures related to those debts, and other expenditures related to money borrowed by the Union;

(3) Expenditures to be paid according to verdict or order or decree released by the court or a particular tribunal; and

(4) Other expenditures to be paid according to a particular existing law or a particular international treaty.

As certain matters specified in the Constitution in the interest of the nation are to be dealt with precisely some are to be addressed through coordination and consultation in the interest of the nation according to democratic practices.

Besides, the Pyidaungsu Hluttaw is to enact the additional funds allotment law in accord with the same procedures, if appropriations and permitted expenditure contained in the Union budget law promulgated by the Pyidaungsu Hluttaw for the fiscal year concerned in addition to the appropriations of extra income and expenditure are necessary to be allowed.

The same procedure of the Pyidaungsu budget is to be followed. The Chief Minister concerned of the region/state is to scrutinize, recommend and submit the region/ state budget including the funds received by respective regions/states from the Union Fund Account. The Region/State Hluttaw concerned will consider the matter and then pass approval and to make rejection and deduction, in accord with the majority consent. However, a detailed basic principle has been laid down for certain expenditures that have to be approved; in this connection, rejection and deduction are not allowed.

They are:

(1) Salary and allowance of heads and members of organizations set up according to the Constitution of the State and expenditures of those organizations at Union level;

(2) Salary and allowance of heads and members of leading bodies of self-administered area set up according to the Constitution of the State and expenditures of those bodies;

(3) Debts the region or state has to settle, expenditures related to those debts, and other expenditures related to money borrowed by the region or state;

(4) Expenditures to be paid according to verdict or order or decree released by the court or a particular tribunal; and

(5) Other expenditures to be paid according to a particular existing law enacted by Region or State Hluttaw.

To ensure proper allotment of funds between the Union and the regions or states discussions were held and in this connection a detailed basic principle has been laid down, which says:

Taxes to be collected according to the law of the region or state and to be put in the Region or State Fund Account are as follows:

(1) Land tax;

(2) Excise;

(3) Water tax, embankment tax of dams and embankments the region of state has the right to manage, and tax on the use of electricity produced by such facilities managed by the region or state;

(4) Tolls from roads and bridges the region or state has the right to manage;

(5) (aa) Royalty collected from fresh water fisheries,

(bb) Royalty collected from marine fisheries located in limited distance;

(6) Tax collected according to vehicles and vessels law of the region or the state;

(7) Other benefits and profits realized from the sale and rent of property owned by the region or state;

(8) Charges, taxes and other incomes realized from services provided by the region or state;

(9) Fines imposed at Region or State Hluttaws including Region or State courts, taxes and other incomes collected for services provided;

(10) Interests realized from the lending of money of the region or state funds;

(11) Profits realized from investment made by the region or state;

(12) Taxes collected for extraction of the following items from forests in the region or state;

(aa) Taxes collected on all other timber except teak and designated hardwood;

(bb) Taxes collected on firewood, charcoal, rattan, bamboo, birdnest, cutch, thanakha, turpentine, eaglewood, and honey-based products;

(13) Registration fees;

(14) Taxes on entertainment;

(15) Salt tax;

(16) Funds received from the Union Fund Account;

(17) Contributions by organizations relevant to development affairs in the region or state;

(18) Unclaimed cash and property;

(19) Treasure trove;

If their funds are not sufficient for development projects implemented annually, the Union Fund Account will provide the funds. Even then more funds are needed, the funds will be provided as special cases depending on the financial situation of the State. Moreover, if the regions/ states are in need of funds to carry out tasks in their respective areas, they can borrow the money in consultation with the Pyidaungsu.

There should be funds and allocation of funds for the implementation of development projects in the regions/states annually. Similarly, the Union itself has to allocate funds from the Union Fund Account for the implementation of various development projects throughout the Union.

That is why the National Convention has laid down a detailed basic principle, the Union shall collect taxes other than those permitted to the regions and states according to law and deposit them in the Union Fund Account. The Union can spend the Union Fund Account according to the law.

The Union territories are to collect funds permitted to the regions/states in their territories according to the Union law and submit them to the Union Fund Account.