Fewer profitable enterprises in Belarus by late 2016
According to the National Statistics Committee, in H1 2016, loss-making enterprises increased in number by one-fourth to 1738, making 23% of their total number. Unprofitable enterprises increased in number due to the reduced state support funding and the overall deterioration of the financial situation amid currency devaluation. Some key enterprises may adjust their performance indicators by using administrative methods (resource allocation, debt fixation in the national currency and deferred payments). Administrative pressure on successful enterprise is likely to increase in order to boost fiscal charges. In addition, administrative and criminal prosecution against managers at large profitable non-state enterprises is likely to increase. If current economic trends persist, the number of profitable enterprises may reduce by 10% by the year-end and net profits in the economy may shrink by 20-25% as compared with 2015.
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.