Taxes Raised for Rebellious Individual Entrepreneurs

Recently in different regions of Belarus tax rate for individual entrepreneurs started to be raised.

For instance, in Mahilyou region the regional council of deputies decided to raise the single tax for individual entrepreneurs averagely at 30%. In Minsk the fixed tax for small businessmen working at markets is to grow by 10 Euro. Experts of “Zavtra tvoej strany” discuss the reasons for that and what consequences could be.

“There is a strange practice in Belarus to shift the responsibility on to businessmen, and it seems to me that it’s enough to overburden businessmen,” tells the head of the Analytical center Strategy Leanid Zaika. “Such an attention to a relatively small group of people (though there are more than hundred thousand of them, but they can earn their daily bread) is an absolutely stupid idea”.

As said by the economist, 117 enterprises exist in the country that give gross production, and one individual enterprise among them sells oil products, and it tops the list of tax payers.

“It’s a small businesses with only 12 workers, it has one table, but they pay more taxes than all other Belarusian businessmen, that is why everything what is done in this sphere is a desire to politicize the economic situation. Things are to be smoothened down for large business, and small businessmen are to be “squashed by an asphalt compactor”. It’s a great mistake of Lukashenka and his whole team,” Leanid Zaika said.

In this way, the expert believes, the government indisposes against themselves the people who are the backbone of the economy of each country. They are business elite, talented people who wanted to be engaged in manufacturing in Belarus.

“As a result of this practice one million of Belarusians does not want to live and work in their country, but work abroad,” the analyst states.

“When people say about harmonization of tax burden, it is better to harmonize it at some minimal rate, in order to create a favourable business climate, as taxes are the important part of it,” Yaraslau Ramanchuk, the head of Mises research center said. “And in Belarus everybody is to match up the maximum, so that everybody would gasp with exertion, and the smallest and weakest would be eradicated, forced to withdraw from market and leave the country”.

To his mind, after Decree 760 when hiring of helpers except for close relatives was banned, after individual entrepreneurs were offered to reregister as private unitary enterprises; since January 1 everybody would pay VAT according to one scheme and the single tax rate would grow, the class of businessmen would be wiped out. It would follow in liquidation of 30-40 thousands of individual entrepreneurs, of their working places.

As believed by the economist, it would bring about price hike in retail trade, which would affect consumers.