Tax on ‘social parasitism’: inefficient, but necessary

December 19, 2016 11:54
Image: SB

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.

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Belarusian authorities resume political cycle: repressions follow liberalisation
March 27, 2017 10:42
Фото: Vasily Fedosenko/Reuters

The Belarusian authorities have revived the cyclical political agenda, including preventive crackdown with the use of force during the Freedom Day rally in Minsk and a loyal attitude to the participants in the opposition events in the regions. The protest rally in Minsk has evidenced that the Belarusian society has freed from the post-Maidan syndrome and showed high self-organisation capacity during the event in the absence of opposition leaders. In the future, the authorities are likely to expand the framework for sanctioned and legal activity for the moderate opposition in order to reduce the potential for street protests.

The Freedom Day march in Minsk on March 25th, 2017 was marked by unprecedented and brutal detentions before and during the event.

The Belarusian leadership has managed to stretch in time the political cycle - liberalization followed by repressions - and move beyond the electoral campaigns. Simultaneously, Minsk has demonstrated a rather high mobilisation potential under political slogans, despite the pressure from the state media and security forces before and during Freedom Day, including the presence of armed officers and new special equipment to disperse demonstrations in the streets of Minsk. That said, in other towns (Vitebsk, Gomel, Brest and Grodno) the Freedom Day march led by the opposition, was sanctioned by the local authorities (except Vitebsk), albeit there were fewer participants than in February and March protests against the decree on social dependants.

The Belarusian leadership has depersonalised (removed leaders) the protest, preventively weakened the protest movement, and has not opted for the harsh crackdown like in 2010 with many injured and hundreds arrested. For instance, some party leaders were preventively arrested or detained (Lebedko, Rymashevsky, Gubarevich, Neklyaev, Logvinets, Severinets) before the event. Nikolai Statkevich has disappeared and his whereabouts are currently unknown. Some could not pass through the police cordons (Yanukevich and Kostusev) or participated in the rallies in the regions (Dmitriev, Korotkevich and Milinkevich).

Despite the lack of protest leaders, some demonstrators managed to self-organize and march down the Minsk centre. The march was unauthorised but gathered several thousand participants. Many were detained by the law enforcement and later released without charges. In addition, the Belarusian law enforcers used some tactics of the western riot police against peaceful protesters, allegedly in order to mitigate the criticism from Western capitals.

Nevertheless, the Belarusian authorities have used the entire set of propaganda and power mechanisms applied during the highly politicised 2006 and 2010 elections - criminal prosecution of the opposition leaders, preventive detentions and arrests of activists, harsh propaganda campaign in the state media and, finally, the crackdown on the protest action in Minsk with the use of force.

Overall, the mobilisation potential of the Belarusian society remains high and the authorities are likely to expand the legal framework for public participation in politics in order to absorb superfluous tension.