Bankruptcy cases to increase by 30%-50% in 2016 in Belarus
According to the Supreme Court of Belarus, as of March 1st, 2016 the court had 2564 lawsuits on economic insolvency (bankruptcy), which was a 38% increase from last year. In late January 2016, every third Belarusian company was unprofitable. As the state reduces its support, even more enterprises are expected to file for bankruptcy, both state and private. In addition, that would lead to higher unemployment. Arrears on taxes and fees to the Social Security Fund will increase, as well as the volume of collateral and real estate sold by banks. Overall, in 2016, the number of industrial enterprises, trade and construction companies that will file for rehabilitation or bankruptcy procedure may increase by 30-50%.
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.