Privatization: conditions change
The authorities adjust the initial value of enterprises put up for an auction by the inflation index, implying they are not willing to apply any discounts. A precedent with the removal of a potentially interesting food enterprise from an auction implies that the nomenclature will intensify its efforts in the fight for access to property.
The initial selling price of stocks of enterprises will be determined by taking inflation into account, thereby partially reversing the effects of devaluation, which reduced their real price. The government ruled that the starting price of government property put out for tenders and auctions will be indexed by the price growth rate of manufactured goods (the Ministry of Statistics reports prices for manufactured goods in January - July 2011 increased by 58.8%). Moreover, the initial price of the stock will also include the amounts of authorized funds increases from the state budget. However these rules would not apply to state-owned enterprises put out for an auction before the new rules enter into force.
The authorities are trying to maximize revenues from privatization via indexing costs of assets in Br, due to the devaluation of the Belarusian ruble. Therefore, the authorities rely on the fiscal effect, while a natural reduction of the price of assets in foreign currency could stir up the interest of investors. The authorities prefer failed auctions to the sale of assets at a reduced price.
The Labour and the Tax Ministries are considering the possibility to include persons engaged in some economic activity without forming a legal entity in the social security system. When the decree No 337 comes into effect, the number of private entrepreneurs is likely to reduce due to the possibility of reducing the tax burden when switching to a tax payment as an individual. 95% of self-employed, including PE, pay insurance premiums on the basis of the minimum wage. The number of self-employed citizens is expected to increase, the number of insurance contributions to the pension system from PE will decrease, the number of citizens who will pay a fee to finance government spending will decrease by several tens. Self-employed citizens have the alternative not to pay social security fees and save resources for future pensions, which, given the gradual restriction by the state of pension requirements could be a more long-sighted option.