‘Exit tax’: authorities look for most suitable mechanism to implement initiative

Category status:
April 22, 2016 18:37

In an interview with Respublika, a Belarusian state newspaper, Belarus’ Deputy Prime Minister Piotr Prokopovich said that the introduction of an ‘exit’ fee for Belarusians travelling abroad was to be considered within the next four to six weeks.

The variety of state decisions about how to pick into citizens’ pockets increases as Belarus’ economic situation deteriorates. The authorities do not dare to introduce large-scale economic reforms or respond to the economic challenges in their typically restrictive manner. On the one hand, Alexander Lukashenko’s proposal to introduce an ‘exit tax’ of USD 100 is a touchstone aimed at assessing people’s reactions and, ultimately, will be implemented in a form which is easiest for the majority to swallow. On the other hand, citizens, who usually rather sluggishly respond to the limitation of their political rights, are more willing defend their economic interests when such a threat occurs.

Negative developments in Belarus’ economic situation have pushed the government to adopt rather dubious mechanisms to address the economic challenges, since they have exhausted means of economic regulation. In the last four months, the country’s foreign exchange reserves continued to decline. Since June 2013, the population has been buying more currency than it was selling, and the gap was increasing each month. Since early 2013, exports by Belarusian companies have reduced significantly, which resulted in goods piling up at warehouses and increased imports. With his initiative to introduce an ‘exit tax’, Lukashenko attempts to address these particular problems.

However, the ‘exit tax’ on those travelling abroad will have only a short-term positive economic effect. If the ‘tax’ is introduced, the population will bypass it by using the open border with Russia.

The ‘exit tax’ initiative is meant to ‘test’ the population’s reaction and to assess the potential limits for picking into their pockets. The initiative has resonated broadly in Belarusian society, especially in the city of Minsk and the border regions. An online petition against the initiative went viral, which was unprecedented for Belarus. In two days, more than 16,000 people signed the petition. Depending on the people’s reaction, the government will choose in six weeks’ time what measures to implement. Most likely, they will affect the interests of the population in the border regions, where many live off cross-border trade. The decision is unlikely to affect Minsk residents much, since they are more active in defending their economic interests.

Authorities already have positive experience with similar initiatives, e.g. ones aiming at reducing the number of those engaged in cross-border trade. In 2011, during the economic crisis, restrictions were introduced, banning vehicles from crossing the border more than once every eight days. Back then, this measure provoked tensions in the border regions and spontaneous protests at border crossings in Grodno and Brest, but the authorities kept the situation under control quite easily.

Today officials are coming up with initiatives that more frequently affect the economic interests of the wider population. How the population reacts will determine the boundaries of the measures that the authorities will dare to implement. In any case, in order to fill the budgetary holes, the authorities will have to find additional financial resources, among others, by picking citizens’ pockets. 

Similar articles

Belarusian and Ukrainian Defence Ministries entangle in confrontation spiral
October 02, 2017 11:57
Фото: RFRM

Over the past year, military-political relations between Minsk and Kyiv have become complicated. Due to their high inertia and peculiarities, this downward trend would be extremely difficult to overcome.

The root cause of the crisis is the absence of a common political agenda in the Belarusian-Ukrainian relations. Minsk is looking for a market for Belarusian exports in Ukraine and offers its services as a negotiation platform for the settlement of the Russo-Ukrainian war, thereby hoping to avoid political issues in the dialogue with Kiev. Meanwhile, Ukraine is hoping for political support from Minsk in the confrontation with Moscow. In addition, Ukraine’s integration with NATO presupposes her common position with the Alliance in relation to Belarus. The NATO leadership regards the Belarusian Armed Forces as an integral part of the Russian military machine in the western strategic front (the Baltic states and Poland). In addition, the ongoing military reform in Ukraine envisages a reduction in the number of generals and the domestic political struggle makes some Ukrainian top military leaders targets in politically motivated attacks.

Hence, the criticism of Belarus coming from Ukrainian military leadership is dictated primarily by internal and external political considerations, as well as by the need to protect the interests of generals, and only then by facts.

For instance, initially, the Ukrainian military leadership made statements about 100,000 Russian servicemen allegedly taking part in the Russo-Belarusian military drill West-2017. Then the exercises were labelled quazi-open and military observers from Ukraine refused to provide their assessment, which caused a negative reaction in Minsk. Further, without citing specific facts, it was stated that Russia was building up its military presence in Belarus.

Apparently, the Belarusian and Ukrainian Defence Ministries have entangled in a confrontational spiral (on the level of rhetoric). Moreover, only a small part of the overly hidden process has been disclosed. That said, third states are very likely to take advantage of the situation (or have already done so). This is not only about Russia.

The Belarusian Defence Ministry officials are restrained in assessing their Ukrainian counterparts. However, such a restraint is not enough. Current military-political relations between Belarus and Ukraine are unlikely to stabilise without the intervention of both presidents.

Recent trends