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Banks to inform tax agencies about their customers

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Banks to inform tax agencies about their customers

Tax inspectors will look for Belarusians “living beyond their means”.

Belarusian banks will be obliged to inform tax agencies about loans issued to individuals and accrued interests, the draft law on amendments to the Taxation Code proposes.

The document is supposed to “oblige banks to provide information about the issued/repaid loans and accrued/paid interests on deposits of individuals on the request of tax agencies.”

Article 121 of the Banking Code (bank secrecy that guarantees non-disclosure of customer information) does not allow tax bodies to receive all information about bank customers, BelaPAN news agency reminds.

”During verifications of compliance with requirements on asset and income declaration for individuals, including the checks to reveal people living 'beyond their means', tax bodies, under article 121 of the Banking Code, do not have an opportunity to check the credibility of information if a person identifies bank loans or deposit interests as a source for purchasing expensive property,” the document says.

According to the document, “there are cases when a person takes a loan from a bank to show the loan agreement to the tax bodies as the document confirming he or she has a source of cash to buy expensive property.”

A person then repay the loan in short terms, for example during a week, the Ministry of Finance explains the reasons for the draft law.

“In reality a person buys expensive property using his or her 'shadow incomes' and takes a loan to legalise the shadow incomes and evade taxes,” the document notes. To eliminate this practice initiators of the draw law propose to oblige banks to disclose information about loans and deposit interests of individuals to tax bodies.

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