Liability for social dependency in Belarus: indicator of problems with budget proceeds
On April 2nd, the president signed decree No 3 “Preventing Social Dependency”. The decree envisages a ‘tax’ for those who do not participate in public spending. Over 1 million Belarusians are not formally engaged in the economy. The authorities are unlikely to raise additional USD 100 million to implement the decree; however, they might spend considerable amounts on identifying those liable to pay the ‘tax’.
As of January 1st, 2015, residents of Belarus, who did not contribute to public spending, or contributed less than 183 days-worth per year would be obliged to pay a 20 basic units fee (USD 245). The fee should be paid no later than November 15th of the year following the reporting period. Penalties for non-payment include a fine from USD 25 to USD 50 or administrative arrest including community service.
The decree is aiming to reach out to 1 million Belarusians who are neither officially employed, nor registered as unemployed. In the authorities’ viewpoint, they do not contribute to public expenditure. According to preliminary estimates, somewhat 400,000 people would be subject to this regulation, while there are not enough jobs in the economy to ensure employment for all of them. In February 2015, Labor and Social Protection bodies reported only 26,500 vacancies.
Belarusian budget is in dire need of additional proceeds. Thanks to this decree, the state budget may raise additional USD 100 million, however that amount may be somewhat inflated. The implementation of the decree will inevitably entail additional administrative expenses, including payroll costs for employees who will be involved in collecting and processing data on social dependents. In addition, the implementation will hardly be efficient – all these employees already have heavy workload. The main success is likely to be achieved through ‘information’ from citizens.
That said, citizens will also make efforts in order to avoid paying the fee. More people will become formally unemployed or working on ad hoc contracts, as well as register as handcrafters.
With this decree, Belarus has de facto introduced a fee for residence in Belarus – regardless of the employment status. Additional budget revenues that the state aspires to raise are inflated as citizens will try to minimize their liabilities to the budget.
Over the past year, military-political relations between Minsk and Kyiv have become complicated. Due to their high inertia and peculiarities, this downward trend would be extremely difficult to overcome.
The root cause of the crisis is the absence of a common political agenda in the Belarusian-Ukrainian relations. Minsk is looking for a market for Belarusian exports in Ukraine and offers its services as a negotiation platform for the settlement of the Russo-Ukrainian war, thereby hoping to avoid political issues in the dialogue with Kiev. Meanwhile, Ukraine is hoping for political support from Minsk in the confrontation with Moscow. In addition, Ukraine’s integration with NATO presupposes her common position with the Alliance in relation to Belarus. The NATO leadership regards the Belarusian Armed Forces as an integral part of the Russian military machine in the western strategic front (the Baltic states and Poland). In addition, the ongoing military reform in Ukraine envisages a reduction in the number of generals and the domestic political struggle makes some Ukrainian top military leaders targets in politically motivated attacks.
Hence, the criticism of Belarus coming from Ukrainian military leadership is dictated primarily by internal and external political considerations, as well as by the need to protect the interests of generals, and only then by facts.
For instance, initially, the Ukrainian military leadership made statements about 100,000 Russian servicemen allegedly taking part in the Russo-Belarusian military drill West-2017. Then the exercises were labelled quazi-open and military observers from Ukraine refused to provide their assessment, which caused a negative reaction in Minsk. Further, without citing specific facts, it was stated that Russia was building up its military presence in Belarus.
Apparently, the Belarusian and Ukrainian Defence Ministries have entangled in a confrontational spiral (on the level of rhetoric). Moreover, only a small part of the overly hidden process has been disclosed. That said, third states are very likely to take advantage of the situation (or have already done so). This is not only about Russia.
The Belarusian Defence Ministry officials are restrained in assessing their Ukrainian counterparts. However, such a restraint is not enough. Current military-political relations between Belarus and Ukraine are unlikely to stabilise without the intervention of both presidents.