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Belarus is concerned about potential losses from Russia’s tax manoeuvre

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April 22, 2016 18:58

The Belarusian authorities have assessed the potential economic losses from Russia’s tax manoeuvre at USD 1 billion. Russia has not yet made a decision, but is considering various options, inter alia, increasing the tax on minerals extraction while reducing export duties on petroleum products, which will lead to higher oil prices on the domestic market and may reduce refineries’ profits, including Belarusian ones. In the event that Russia adopts tax changes, she might envisage a re-compensation mechanism, for example, partially or completely abandon the transfer of duties to the Russian budget. That, in turn, will require Belarus to revise her 2015 budget. In addition, Russia may allocate additional credit resources at a good discount to compensate for higher oil prices for Belarus. Russia may also revise the share of customer-owned oil refining in Belarus and increase refining costs for Russian companies. Russia may postpone implementation of the tax manoeuvre indefinitely, if so, Belarus will withdraw her claims.

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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.

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