Tax on ‘social parasitism’: inefficient, but necessary
After President Lukashenka said that the Decree No 3 envisaging the tax on social dependents would be amended, not abolished, the tax authorities released the decree implementation report. According to the report, the tax authorities failed to administer the tax, moreover, its economic impact was negligible. The decree was meant to be used as an additional tool to regulate labour market and official unemployment.
The tax authorities sent 73 000 notices to potential payers of the tax on ‘social parasitism’, of which 15 000 were able to prove their right not to pay the tax. Only about 10800 people paid the tax, from whom the state budget raised circa USD 1.2 million. Initially, the authorities assumed that in 2016 there would be circa 160000 taxpayers, who would raise circa USD 40 million for the state budget. In addition, they calculated that in the future the taxpayers number would rise up to 400 000, contributing circa USD 300-400 million to the state budget annually.
Independent analysts doubted the efficiency of such a system and pointed at its high costs. In addition, as the tax authorities mailed their notices to tax payers, major shortcomings in the taxpayers’ database were revealed - it listed citizens exempt from tax and the deceased. The authorities failed to respond to requests by ‘Tell the Truth’ campaign and independent media about administrative costs of such a tax. However, indirect evidence shows they were rather high: 27 government agencies and 82 000 organisations were involved in compiling the taxpayers’ database.
Amid growing unemployment and falling wages, despite sharp criticism by independent analysts, some government members and discontent among the population, the Belarusian authorities will not repeal the decree. Instead, they plan to improve the system by exempting some categories of unemployed from the taxpayers’ list.
In addition, as Belarusians get used to the idea, the state may introduce additional systemic measures to raise additional proceeds from the population and expand the list of those liable to pay the tax. So far, people showed their discontent with the authorities’ action by refusing to pay the tax, with some local initiatives collecting signatures to abolish the decree and with some appeals by the opposition.
The Belarusian authorities regard the Catholic conference as yet another international event to promote Minsk as a global negotiating platform. Minsk’s proposal to organise a meeting between the Roman-Catholic Church and the Russian Orthodox Church is rather an image-making undertaking than a serious intention. However, the authorities could somewhat extend the opportunities for the Roman-Catholic Church in Belarus due to developing contacts with the Catholic world.
Minsk is attempting to lay out a mosaic from various international religious, political and sportive events to shape a positive image of Belarus for promoting the Helsinki 2.0 idea.
Belarus’ invitation to the head of the Holy See for a meeting with the Patriarch of the Russian Orthodox Church should be regarded as a continuation of her foreign policy efforts in shaping Minsk’s peacekeeping image and enhancing Belarus’ international weight. The Belarusian authorities are aware that their initiative is unlikely to find supporters among the leadership of the Russian Orthodox Church in Moscow. In Russia, isolationist sentiments prevail.
In addition, for domestic audiences, the authorities make up for the lack of tangible economic growth with demonstrations of growth in Minsk’s authority at international level through providing a platform for religious, sportive and other dialogues.