Belarus plans to reduce VAT rate by abolishing VAT benefits by 2020

Within three years, the Tax Ministry plans to find reserves to reduce the VAT rate. VAT is responsible for up to 30% budget revenues. In 2016, VAT accounted for BYN 8.2 billion in budget revenues. Belarus is expected to reduce VAT to 18%, like in Russia; this process could be postponed to 2020. In the case of VAT reduction, budget revenues are unlikely to drop due to the cancellation of VAT benefits for various enterprises and activities. Abolished benefits for loss-making enterprises could be offset by additional state subsidies or other types of budgetary support. The process of reducing VAT could be suspended or cancelled in the case of changes in tax laws or tax devaluation in Russia, which could reduce the payroll tax and increase VAT in order to stimulate exports.