Belarusian authorities test people’s reaction to bizarre tax initiatives
The government proposes to introduce a fee for using private vehicles, as well as a tax on so-called ‘spongers’ (i.e. people who do not work for a living and do not contribute to society).
The authorities’ bizarre tax initiatives are meant to measure society’s response and to find the best way to pick citizens’ pockets to replenish the budget. The authorities are seeking ways to seize people’s income so that it has the least impact on the president’s approval rating and will not result in open protests. The state plans to preserve the current economic policy in the short and medium term by reducing the welfare state.
In January – September 2013the national budget surplus was BYR 1299.2 billion. According to preliminary estimates, by the year-end, the budget deficit will be BYR 411.5 billion (about USD 44 million). The deficit will be caused by the shortage of income tax and foreign trade revenues. In January – September 2013 only 41.7% of the projected income tax were listed to the budget, and only 60.3% of foreign trade revenues. In 2013 Belarusian imports reduced and export duties on potash zeroed out, creating budget deficit by the year-end.
Budget deficit could be recovered by two means: either by cutting costs or by finding additional sources of revenues. While the government could reduce expenditure on security agencies, banks, re-compensations, and other budget items, it focuses on citizen’s pockets and additional taxes for population as the new sources of budget revenues.
The authorities said they would increase the share of cost recovery for housing and communal services in 2014, would raise the excise duties on motor fuels by circa 14.5% and came up with some other exotic initiatives to pick citizens’ pockets.
Belarusians respond sluggishly to violations of their civil and political rights and freedoms, but are quite ready to defend their economic interests. Some previously announced bizarre initiatives, such as the introduction of new fees and taxes, were disavowed following reactions in the society. Over 25,000 people signed a petition against introduction of the USD 100 ‘exit’ fee.
It is worth noting that such bizarre initiatives have not been voiced by Lukashenko, but by other public officials. Lukashenko wants to avoid a negative impact on his approval rating before the elections. The latest initiative, regarding a tax on cars, was announced by a minor Finance Ministry official.
Simultaneously, some new tax initiatives have developed. For example, Prime Minister Myasnikovich’s proposal to tax the unemployed (up to USD 280 per annum) and the tax on using private cars have become draft laws. Neither the government nor the ministry officials are sensitive to society’s reaction, their future careers depend entirely on the president’s goodwill.
In addition, president Lukashenko demanded to complete the transition to a contract employment system. This mechanism proved effective in reducing workers’ protest moods before the 2006 presidential elections. According to Statistics Ministry, by late 2005, 92 % of workers in Belarus had been enrolled in fixed-term contracts system.
The authorities continue searching for the least painful ways to replenish the state budget at the expense of the population without changing the current policy.
The Belarusian authorities regard the Catholic conference as yet another international event to promote Minsk as a global negotiating platform. Minsk’s proposal to organise a meeting between the Roman-Catholic Church and the Russian Orthodox Church is rather an image-making undertaking than a serious intention. However, the authorities could somewhat extend the opportunities for the Roman-Catholic Church in Belarus due to developing contacts with the Catholic world.
Minsk is attempting to lay out a mosaic from various international religious, political and sportive events to shape a positive image of Belarus for promoting the Helsinki 2.0 idea.
Belarus’ invitation to the head of the Holy See for a meeting with the Patriarch of the Russian Orthodox Church should be regarded as a continuation of her foreign policy efforts in shaping Minsk’s peacekeeping image and enhancing Belarus’ international weight. The Belarusian authorities are aware that their initiative is unlikely to find supporters among the leadership of the Russian Orthodox Church in Moscow. In Russia, isolationist sentiments prevail.
In addition, for domestic audiences, the authorities make up for the lack of tangible economic growth with demonstrations of growth in Minsk’s authority at international level through providing a platform for religious, sportive and other dialogues.