“Sly” Tax: Where One Third Of Belarusians’ Wages Goes

What is so bad about the tax which makes Belarusian entrepreneurs feel so discontent?

In July, a group of individual entrepreneurs appealed to the Ministry of Economy with a demand to change the order of paying dues to the Fund of Labour and Social Protection. This event actually passed unnoticed by the majority of the Belarusian citizens. Still, this tax is considered one of the “slyest” and directly concerns every working Belarusian.

For example, if a statistically average worker earns Bn 500 per month, he is obliged to give Bn 175 out of this sum to the Fund of Social Protection. And they do, moreover, they do it on a monthly basis. However, workers often know nothing about it as it is the employer who pays this tax on their behalf.

— The Fund of Social Protection accumulates about 10% of the GDP or one third of the country’s consolidated budget, — leader of the project “The Cost of Government” Uladzimir Kavalkin clarifies to Solidarity. — The Fund’s main sources of income are various dotations from the Republican budget and the dues, paid by the citizens.

According to the expert, this money should go for pensions and allowances in theory, but it is only the officials who know exactly how this huge sum is spent.

— Unfortunately, the Fund publishes no information where it gets money from and how it spends it, — Uladzimir Kavalkin adds. — This means, there are no specified items of expenditure — we cannot see how much money goes to one or another category of citizens, like force structures employees, for instance. This information remains closed.

Solidarity’s interlocutor also believes that the tax itself is very high and does not stimulate the business to pay this sum:

— It really is huge — so the business tries to avoid it by paying “envelope wages”. We need a clear and open system to make people understand that their money goes not to some unintelligible structures, but will actually come back in the form of pensions and allowances. The citizens need to be interested, so that they would feel it’s not another due but an opportunity to save money.

Unfortunately, so far the problem of payment of the so-called “social dues” worries only the business representatives. Meanwhile, most Belarusian citizens seem to have forgotten their role as tax-payers, who are not only obliged to deduct money to keep the state, but also have a right to ask how exactly this money is spent.