Agricultural lobby triggered reorganization for debt relief
President Lukashenka has approved measures on financial recovery of agricultural enterprises, which envisage pre-trial rehabilitation for some enterprises and bankruptcy for others. Despite the fact that the state annually invests large amounts from the state budget to agriculture, agricultural enterprises are among the main troubled borrowers. One quarter of all agricultural enterprises is unprofitable. However, the authorities are not envisaging changing their approaches. They will not abandon their plans to create large holdings, which will attach insolvent agricultural enterprises to profitable ones. In the mid-2000s, the state attempted to attach unprofitable agricultural enterprises to successful private companies in order to support agricultural production and employment in rural areas, but to no avail. In addition, this problem issue was raised during the All-Belarusian People’s Assembly. Most likely, reorganization of agricultural enterprises is caused by the need to write-off bad debts. In addition, the administration may regard such reorganisation as a way to improve performance indicators in order to meet the requirements of international lenders.
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.