Exactions From ‘Social Parasites’ To Return Soon

The Belarusian economy cannot be rescued, even with new taxes and abolishment of privileges.

Deputy Minister of Finance Yury Seliverstau voiced extra sources for the replenishment of the Belarusian budget. According to him, expanding of the taxation base may become one of the main such sources, as well as including other incomes into the tax base, abolishment of privileges, and improvement of the real sector’s performance, Radio Racyja reports.

Leader of the project “Cost of Government” Uladzimir Kavalkin told about the sources for the budget replenishment, which the authorities count upon:

- I think not many from this list can replenish the budget indeed. For example, when they speak about the expanding of the taxation base, it will work only given the economic growth, and the Ministry of Finance cannot influence that in any way. If there’s no growth, than significant expanding of the taxation base is not very effective. Cutting tax privilieges may partially work, but the question remains – which exactly priviliges do they plan to cut? Whom are they going to divest the privileges off? If they cut the privileges for the state-owned enterprises, and then re-distribute the same money from the budget, then what’s the point? If we talk about commerical companies, they already work with no privileges actually, as many privileged taxation regimes have been abolished in the last 3-4 years. The positive thing is they don’t rise the tax rates.

- The Ministry of Finance plans to include “other incomes” into the tax base. What incomes can that be?

- Most likely, this refers to the people who earned money abroad semi-legally, and do not pay the income tax. Maybe they will pay attention to some small business. Maybe they will try to take more money from the individual entrepreneurs. Truly, there’s no specific information now, so we can only presume things.

- They will probably return to the “social parasites” issue after a while, and try to exact money from them as well?

- In fact, the “social parasites’ decree” creates more problems for all, than solves. For instance, expenses for the collection of finance surpass the final incomes. In addition, there comes the negative PR effect for the state, so I do not think it is a proper way out of the situation. A year later, this issue will probably re-emerge, and there will be the need to decide what to do with the decree next. Still, from an economic point of view, it makes no sense at all.