Tax inspection as a prototype of state collection agency

April 22, 2016 18:42

In January – September 2013, the situation with settlements in Belarus’ economy deteriorated. Companies have resorted to unconventional methods to coerce debtors to pay for the supplied products, inter alia, using tax inspections as mediators. Against the background of unaffordable loans, companies might resort to non-monetary settlements and mass offsets.

As of October 1st, 2013 overdue payables in the Belarusian economy were $2.7 billion.

In 2013, the situation with settlements in the Belarusian economy deteriorated considerably. On October 1st, Belarusian enterprises’ payable accounts were circa $2.3 billion – a 23.6% increase since early 2013. Overdue payables grew at a faster pace, and increased by 62.8 %, reaching $2.5 bln. These statistics do not fully reflect the whole picture. For instance, payment due dates under agreements are prolonged and payments are delayed for up to 120 days, and sometimes, in order to unload warehouses, payments are put off for over a year. Some debts cannot be recovered due to debtors’ insolvency.

Problems with payments in the economy have pushed enterprises to using various mechanisms from the early 90s to squeeze money out of debtors. For example, they started recovering debts through tax inspections. It works as follows: when a company is due to pay taxes, it shows the tax authorities that it has no funds on its accounts. At the same time, the company provides the tax authority with a list of its debtors. The tax authority then charges the due amount of taxes and a bit more from the debtors’ current account. Finally, the tax authority pays back the excess tax to the company or offsets it.

This scheme is an efficient way to fight against chronic non-payment by some enterprises. State-owned enterprises receive production plans, which result in overstocked warehouses, current accounts’ deficit and, hence the need for new loans.

Barter transactions have also become widespread. If this trend continues, enterprises might start using promissory notes (bills of exchange), which were popular in the late 90s.

All these settlement types are archaic, but help to ease the problems with mass defaults in Belarus’ economy.

Similar articles

Death penalty discussion in Belarus: yet not ready for either abolition or moratorium
September 18, 2017 10:43
Фота носіць ілюстрацыйны характар. Источник: Читать далее:

The Belarusian authorities have launched a discussion on the moratorium or abolition of the death penalty under the pressure of Belarusian human rights activists and international community. Apparently, the authorities are interested in monitoring public sentiments and response to the possible abolition of the capital punishment. The introduction of a moratorium on the death penalty would depend on the dynamics in Belarusian-European relations, efforts of the civil society organisations and Western capitals.

In Grodno last week, the possibility of abolishing the death penalty in Belarus or introducing a moratorium was discussed.

The Belarusian authorities are likely to continue to support the death penalty in Belarus. During his rule, President Lukashenka pardoned only one person, and courts sentenced to death more than 400 people since the early 1990s. Over the past year, Belarusian courts sentenced to death several persons and one person was executed.

There are no recent independent polls about people’s attitude about the death penalty in Belarus. Apparently, this issue is not a priority for the population. In many ways, public opinion about the abolition of the death penalty would depend on the tone of the state-owned media reports.

That said, the Belarusian Orthodox Church and the Roman-Catholic Church stand for the abolition of the capital punishment, however their efforts in this regard only limit to public statements about their stance. Simultaneously, the authorities could have influenced public opinion about the death penalty through a focused media campaign in the state media. As they did, for example, with the nuclear power plant construction in Astravets. Initially unpopular project of the NPP construction was broadly promoted in the state media, and eventually, according to independent pollsters, was accepted by most population.