Targeted housing subsidies will reduce state's expenses on housing construction in Belarus
According to Decree 240, a new type of state support for citizens in need of improving housing conditions has appeared in Belarus, state targeted subsidies.
The difference from the previous system, which is likely to be scrapped in the future, is that it envisages assistance directly to citizens, without the banks. The subsidy size would depend on the type of the need and would be tied to the National Bank’s discount rate. Belarusians are likely to increase spending on housing construction and reduce financing of the construction industry. Support for large families will be reduced by increasing loan servicing costs, and loan terms for this group of citizens would be reduced from 40 to 20 years. Lending for housing construction at commercial rates would increase due to increased participation of banks in lending programmes.
As interest rates in the economy decrease, the state may abandon targeted housing subsidies altogether; the transition to market relations in construction would expand the circle of potential housing buyers through optimised prices and increased competition among developers.
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.