Flat Tax Quadruples in Belarus

What changes has Father Tax brought to the country?

In the first readings, the so-called "deputies" adopted amendments to the Tax Code of Belarus. In short, the rates will go up.

Nasha Niva journalists took a look at changes for IEs (individual entrepreneurs), owners of agricultural homesteads and self-employed people.

The fee for agricultural homesteads will increase. It is now two basic units a year (58 rubles), and from next year - 31 rubles per month (372 rubles a year).

Single tax will increase by 2-4 times depending on the type of activity.

Let us consider the rates for Minsk. For example, for IEs trading in leather goods, carpets, complex electrical appliances, the tax next year will be 1260 rubles (instead of the current 315). For other IEs the changes are also noticeable. For entrepreneurs in medicine and dentistry tax will increase from 208 to 832 rubles, hairdressers - from 135 to 540 rubles, those engaged in cargo transportation - from 187 to 535 rubles, construction work - from 155 to 478 rubles, renting flats - from 37 to 148 rubles.

And here's how the single taxes for individuals (self-employed) will increase. Bread and pastry vendors will have the rate increased from Br47 to Br96, videographers - from Br129 to Br263, translators - from Br83 to Br169. Hairdressers and manicure specialists will pay Br226 a year (currently Br111), while clothing manufacturers will pay Br135 (instead of Br66).

Changes are also waiting for those who keep subsistence farming and subsequently sell vegetables, meat or other agricultural products. If their income from these activities exceeds 200 basic units per year (currently Br5,800), they would have to pay 10% of the excess amount. At present, this income is not taxed.

The same applies to individuals who gather and sell wild berries, mushrooms, medicinal herbs, nuts.

Starting next year the simplified tax for individual entrepreneurs will be 6%. Today entrepreneurs working under the simplified tax system can choose whether to pay 5% tax or 3% plus VAT.

Individual entrepreneurs who provide services will not be able to use the simplified taxation system. An exception is made for those engaged in tourism, healthcare, overland transport, public catering, and computer programming.

Organisations with more than 50 employees (the current limit is 100) will not be able to use it either. However, according to Zhanna Tarasevich, head of the Kunyavski Business Union of Entrepreneurs and Employers, this change is not critical.

"We have the average number of employees in small businesses that use the simplified taxation system - 8-9 people. Therefore, it will not have much impact," she says."

From 2023 there will be no simplified tax for individual entrepreneurs (only for micro-enterprises). Entrepreneurs will have to switch either to the flat tax or the income tax.

From 2023, a professional tax will be introduced for the self-employed and craftsmen. It is not yet known what kinds of activities will fall under it. The tax will replace income tax and contributions to the social security fund. Its size will depend on revenue - 10% if it is less than 60 thousand rubles a year, and 20%, if it is more.

"Some of the things we talked about have already been implemented. Only not in the best way," Tarasevich says. - Organized business has always raised the issue that taxes should be levelled. But this does not mean they should increase.

The tax burden on business will not decrease. We said it was worth leaving the simplified system for another year with the possibility of paying VAT. This was not heard either".