Belarus Unveils Ambitious Tax Hike Initiative

This will affect almost everyone.

In 2024, more money needs to be attracted to the state budget from enterprises, organizations, individual entrepreneurs and businesses, said Deputy Minister of Taxes and Duties Ela Sialitskaya at the conference “The practice of applying legislation in the field of taxation and the main changes in 2024.”

She explained what would change and whom it would concern.

She stated that tax rates in Belarusian rubles will be increased by 7.5% (they will be indexed to the forecast inflation parameter). The bill for amendments to the Tax Code also provides for an increase in excise tax rates “taking into account the international obligations of Belarus under agreements on general principles of taxation for indirect taxes concluded between the governments of Belarus and Russia.”

Those who earn more will pay more

According to the deputy minister, “targeted increased taxation is provided, namely: increased rates of direct taxes for income generated in highly profitable areas of activity and expensive property.”

“In particular, the income tax rate increases when a profit exceeds 25 million rubles per year. An income tax rate of 25% is established in relation to the total income received by individuals from sources in the Republic of Belarus, taxed at a rate of 13% under employment contracts, in the form of dividends, as well as under civil law contracts, the subject of which is the performance of work, provision of services, creation of intellectual property in an amount exceeding 200 thousand rubles per calendar year,” Sialitskaya said.

The almost doubled tax of the Ministry of Taxes will be calculated on the basis of a tax return, Sialitskaya clarified. It must be submitted no later than March 31, 2024.

Individual entrepreneur and half a million rubles a year

Individual entrepreneurs will also have to pay more taxes: from 2024, the income tax rate for individual entrepreneurs will be set at 30%, the deputy minister said.

“Income taxes will have to be increased significantly when receiving gross revenues exceeding 500 thousand rubles per year. In addition, this will lead to the termination of activities as an individual entrepreneur starting next year,” Sialitskaya clarified.

High tax for driving expensive cars

According to the deputy minister, there will be “spot hits” in filling the budget. For example, the tax for those who drive expensive cars will increase sharply.

“The transport tax rates are increasing for owners of luxury cars with a service life of no more than three years from the date of their release by applying a factor of 10 to the transport tax rates for such cars,” Sialitskaya said.

She clarified: it is assumed that the list of vehicles will include luxury car models of Bentley, Rolls-royce, Lexus, Porsche, Mercedes, Audi, BMW, Cadillac, Jeep, Land Rover and Jaguar.

Some benefits have been canceled

These are not all the tax innovations that will be introduced in 2024, Sialitskaya said. According to her, some benefits have been canceled or revised since 2024.

The tax benefit on profits from corporate bonds with a maturity of less than a year has been cancelled. We increased the preferential rate from 5 to 10% on sales of high-tech goods of our own production. The benefit for producers of food products for infants and preschool children was canceled (with the introduction of taxation of profits on the sale of such products at a rate of 5%). The benefit was canceled and taxation was introduced at a reduced rate of 0.1% for real estate tax in relation to mothballed permanent structures of buildings and structures of the organization, as well as buildings and structures of RUE Belposhta.

Deductions for young professionals have been introduced

But the changes in the new code are not only about increasing taxes. As Sialitskaya stated, the bill also provided for “a number of incentives to increase the efficiency of the production process and the development of certain sectors of the economy.”

“To reduce the shortage of workers in blue-collar professions, an additional monthly income tax deduction in the amount of 620 rubles is provided to graduates of higher, secondary specialized, vocational and technical institutions aimed at distribution work,” said the deputy minister.

The deduction will be provided during the period of compulsory work and the period of subsequent contract extension, but not more than for seven years, Sialitskaya clarified.

There is one more innovation. Until April 1, 2024, tax agents will be required to submit information on the income of individuals for 2023 in electronic form.