This Selected Issues paper reviews developments during 2001–02 in the Belarusian pension system, and discusses potential short- and medium-term reforms needed to put pension system finances on a sustainable path. The paper presents a short overview of demographic trends and developments in Belarus and their impact on the pension system. It discusses the financial difficulties of early 2002 and the policy measures the authorities took to deal with them. A critical review of the methodology used in preparing annual Social Protection Fund budgets is also presented.

Abstract

This Selected Issues paper reviews developments during 2001–02 in the Belarusian pension system, and discusses potential short- and medium-term reforms needed to put pension system finances on a sustainable path. The paper presents a short overview of demographic trends and developments in Belarus and their impact on the pension system. It discusses the financial difficulties of early 2002 and the policy measures the authorities took to deal with them. A critical review of the methodology used in preparing annual Social Protection Fund budgets is also presented.

V. Status of the Tax System1

As of January 1, 2003

A. Individual Income Tax

1. Taxable income includes cash income in domestic and foreign currencies and in-kind income earned in Belarus and abroad. There are several types of income which are not taxed, such as the following: (i) certain gifts (material incentives) received from an enterprise in an amount of 30 monthly minimum wages (MMW) per year; (ii) free or discounted health resort treatment, and other support of social protection nature; (iii) all forms of social benefits (pensions, benefits under state social insurance and state social welfare (except temporary disability benefits), benefits paid by the state to citizens who suffered from the Chernobyl accident, and scholarships for students; (iv) proceeds from the sale of private property (once every five years for real estate and once a year for vehicles); (v) income from sale of products from private plots; (vi) interest and gains on deposits with banking institutions and on government securities; (vii) income received by inheritance and income received as a result of a gift from close relatives, regardless of the amount; and (viii) income received as a result of a gift from other individuals whose permanent residence is located on the territory of Belarus, up to two hundred times the MMW per gift, but not to exceed five hundred times MMW in a year; (ix) technical assistance and other foreign assistance rendered free of charge to individuals on projects and programs, approved by the President or government of Belarus, as well as under international agreements.

2. The income tax on physical persons is collected on a progressive rate scale. Tax rates are differentiated depending on taxable income expressed. The rate scale below became effective on January 1, 1999. Dividends and similar income, if earned, are taxed at a rate of 15 percent.

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3. Members of kolkhozes (or of agricultural entities with a collective form of ownership formed out of former kolkhozes) pay income tax on the basis of the same procedure as all other tax payers.

4. Deductions for children and dependents are:

  • 2 MMW per child up to age of 18 and for each dependent.

5. Deductions amounting to 10 MMW per month (120 MMW per year) are allowed for the following taxpayers:

  • persons who fell ill and suffered radiation sickness from the consequences of the Chernobyl disaster, and persons who participated in disaster recovery efforts;

  • veterans of various wars; and

  • categories I and II of disabled persons with all types of disability.

The following amounts are subject to deduction from taxable income:

  • amounts transferred by persons who are registered as being in need of improvement of their living condition, within the reported calendar year, limited to the actual amount spent on the construction or purchase of apartments, or for repayment of credits used for these purpose;

  • non-cash contribution by legal entities and entrepreneurs for the construction or purchase of housing for persons who are registered as being in need of improvements of their living condition;

  • amounts paid by taxpayers within the reported calendar year to the educational institutions located in Belarus, as well as for the education of a spouse and/or their children when they obtain the first higher education or secondary special education.

B. Tax on Income and Profit

6. The income and profit tax is levied on legal entities, including enterprises with foreign investments, foreign legal entities, subsidiaries, representative offices, branch offices, and other structural subdivisions possessing an independent (separate) balance sheet and a settlement (current) account, as well as parties to a joint operating agreement, who have been assigned responsibility for overall management of these operations.

7. The income tax is paid on dividends and income treated as dividends under the law; the tax rate is 15 percent.

8. The profit tax is paid on balance-sheet profit. Balance-sheet profit is defined as the total profit from sale of products, goods (work, services) and other assets (including fixed assets, commodity stocks, intangibles, and securities) and income from operations unrelated to sales, less the expenses of these operations. Profit from the sale of products and goods (work, services) is defined as the difference between total receipts and the costs of business and commercial activity. The tax rate is 30 percent. Enterprises with balance-sheet profit for the year not exceeding 5,000 MMW and having an average annual number of employees, as listed below, are taxed at a reduced rate of 15 percent: in industry’—up to 200 people; in science and scientific services—up 100 people; in construction and other productive sectors—up to 50 people; in nonproductive sectors—up to 25 people.

9. The profit of enterprises, scientific associations, and other organizations of the agroindustrial complex received from production, technical, transportation, and scientific services, material and technical support, and repair and manufacture of equipment, as well as profit received from rendering these services to enterprises and organizations of the agroindustrial complex, is taxed at a rate of 10 percent. The profit of construction, repair-and-construction, and other organizations of the agroindustrial complex received from construction and repair of productive facilities of the agroindustrial complex is taxed at a rate of 7 percent.

10. Fixed amounts of profit tax may be set for enterprises conducting types of activity determined by the Council of Ministers. Such activities currently include retail sale of goods through small retail outlets, stores (on the condition that the total trading space of stores belonging to a single owner does not exceed 25 square meters), public catering enterprises, and at markets, fairs, and sales exhibitions.

11. Tax concessions with reduced rates are defined legislatively. They include: (i) profits used for disaster recovery at Chernobyl in accordance with the republican program; (ii) profits used for environmental and fire protection, scientific research, experimental design, and experimental engineering; and (iii) other uses of profits in selected enterprises and sectors, as defined by law.

12. Profit-tax exemptions are granted to six categories of enterprises including: (i) enterprises where a certain number of employees is disabled employing certain percentage of disabled workers and retiree-age workers in their workforces; (ii) enterprises with foreign investments in which the share of foreign investment is more than 30 percent of the authorized capital; and (iii) other exemptions, as specified by law.

C. Value-Added Tax

13. Effective from January 1, 2000, the value-added tax (VAT) is paid by legal entities, including enterprises with foreign investments and foreign legal entities, and subsidiaries, representative offices, and other independent subdivisions of legal entities possessing a separate balance sheet and a settlement account, participating parties in joint ventures, enterprises and physical persons that engage in transit of goods via the territory of Belarus in accordance with the customs regulations of Belarus, and individual entrepreneurs if their proceeds from sale of goods (works or services) for the previous month exceeded the equivalent of Euro 17,000 at the exchange rate set by the National Bank of Belarus for the last day of the month.

14. As of January 1, 2000, in accordance with the Law on changes and additions to the value added tax (Law No. 324-3), the authorities implemented the invoice method of calculating the VAT. Taxpayers’ VAT liability (T) is calculated as the product between the tax base (B) and the tax rate (t). The tax liability is determined as the difference between the total tax liability and any tax credits (off-sets) calculated for a given tax period. If the latter exceeds the former, the tax payer is not obliged to pay VAT and the difference is carried over without penalty and deducted from tax liability in the next period or refunded to the taxpayer.

15. In accordance with current legislation, VAT is not levied on the following categories of goods and services: (i) goods and services used by foreign diplomatic missions and associated representative offices and for personal use of their diplomatic and administrative personnel and their immediate family members living in the same households. This exemption takes the form of a tax return to diplomatic missions and representative offices; (ii) receipts of certain authorized organizations performing certain services (customs, all forms of licensing, registration, patents, fee collected by government agencies, including local governments and other authorized agencies), payments for the use of natural resources, tax earmarked for the environmental protection fund, forestry tax, other payments to the budget, budgetary and extrabudgetary funds: (iii) property of enterprises in the form of deposits in the statutory fund in certain proportions; (iv) value added on primary sale of government securities; and (v) budgetary revenues from privatization and rentals of government enterprises.

16. Value added tax is levied at the following rates:

  • Zero (0) percent on exports of goods; labor and services of transit, loading, shipment and transshipment and other similar labor and services directly related to the sale of exported goods; exports of construction goods, transport services, and services arising in the production of raw materials; and goods and services directly related to the transit via the territory of Belarus.

  • Ten (10) percent on value added of enterprises and individual entrepreneurs in farming (excluding flowers and decorative plants), animal breeding (excluding fur animals), fishery and honey bee production; enterprises producing goods for children according to a list determined by the council of ministers; producing enterprises using new and high technologies according to a list determined by the ministry of finance; household services; and imports of consumer goods for children according to a list determined by the council of ministers.

  • Twenty (20) percent on other goods and services not listed above. In addition, the law determined the rates of 9.09 and 16.67 percent, respectively, which are levied on goods and services subject to regulated prices (tariffs).

17. A number of goods and services are exempted, including medicine, medical equipment, tools and machines, medical and veterinary services (excluding cosmetic services), services for sick, handicapped and elderly, services for pre-school childcare, child education in local, music, and sport schools and facilities, education sen-ices, culture and arts services, financial and insurance services, communication and media services etc.

18. When imported into the customs territory of Belarus, the following items are exempt from VAT:

  • transportation equipment used for transporting goods or passengers, as well as supplies, fuel, food and other property necessary for normal exploitation of the means of transport used for the time spent on travel, at intermediate stops or purchased abroad to recover from an accident or a break-down of the means of transport used;

  • goods in transit via the customs territory of Belarus and destined for third countries;

  • goods that are subject to confiscation in accordance with the Belarus legislation;

  • goods for sale at duty-free shops in the special zones under customs control.

19. In accordance with current legislation, the VAT is levied on the basis of the destination principle in foreign trade relations with the following Commonwealth of Independent States (CIS): Ukraine, Kazakhstan, Moldova, the Kyrgyz Republic, Tajikistan, Uzbekistan, Armenia, Turkmenistan, and Azerbaijan and in trade with non-CIS countries. That is, the VAT is collected when goods are imported from CIS countries, while goods exported to CIS countries (except Russia and Georgia) are not taxed. Belarus maintains country-of-origin principle with Russia and Georgia.

20. According to the Resolution No. 72 of the Council of Ministers dated January 22. 2002 “On the time of value added tax payments the budget” the VAT is calculated by the taxpayer, and paid to the budget no later than the 22nd day of the month following the month for which the tax is due. Besides, current payments are made on specific dates depending on the amount of the tax: (i) every five days when the amount of the tax for the preceding month was over 5,000 BV; and (ii) every ten days when the amount of the tax for the preceding month was from 3,000 to 5,000 BV.

D. Excises

21. A new version of the Law of Belarus “On Excises” went into effect on January 1, 1998, in an effort to harmonize the legislations of Belarus and Russia.

22. According to the law, uniform excise rates are effective throughout all of Belarus both for goods produced by payers of excises and for goods carried into the customs territory of Belarus and (or) sold in the customs territory of Belarus by payers of excises.

23. Excise rates on goods are established as an absolute amount per physical unit of measurement of excisable goods (fixed rates, or specific rates) or as percentages of the value of goods (ad valorem rates). Excise rates are set by the council of ministers in coordination with the president.

24. To permit unification of legislation of Belarus and Russia, excises on goods carried in from CIS countries are offset. Thus the amount of excises payable on excisable goods originating and carried in from CIS states is decreased by the amount of excises actually paid in the country of their origin. This provision is applied on the conditions of reciprocity by a procedure determined by the Council of Ministers.

25. The list of excisable goods may be redefined by the National Assembly at the request of the President.

26. As of January 2003 the following excise rates apply:

Belarus: Excise Rates

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Except for wine materials and cognac spirits.

Except for spirit-containing solutions with ethyl spirit share up to 12 percent.

Mini-buses include vehicles for carrying not more than 17 (including a driver), as well as trucks with capacity of no more than 1.25 tons. including those re-equipped from mini-buses.

E. Import Duties

27. In accordance with the Agreement on the Customs Union, customs borders were abolished between Belarus and Russia, and customs rates were changed so as to be similar. Import duty rates were revised in December 1997 and May 1998. Customs duty rates effective in Belarus and Russia are now almost completely the same.

28. Import duty rates set by government Resolution No. 865 of June 28, 2002 “On the Approval of Import Duty Rates” apply to countries that have been granted most-favored-nation treatment by Belarus.

  • Goods originating and entering the Belarus customs territory from countries to whom Belarus applies a free trade regime in trade and economic relations are exempted from customs duties, except for white sugar (Commodity Nomenclature code 1701 99 100), imported to the Belarus customs territory from countries that are not included in Euro-Asian economic community and originating in these countries is subject to import customs duties set up at established rate;

  • Goods originating from countries to whom Belarus applies a free trade regime in trade and economic relations and being imported to the Belarus customs territory from third countries are subject to import customs duties at rates established the this Resolution;

  • Goods originating from countries where in trade and political relations Belarus applies the most favored nation status and being imported to the Belarus customs territory are subject to customs duties established b this Resolution;

  • Goods originating from Belarus and being imported to the Belarus customs territory are subject to import customs duties established b this Resolution, except for goods imported from countries to whom Belarus applies free trade regime in trade and economic relations and the are imported under the agreement on a free trade zone;

  • Goods originating from countries to whom Belarus does not apply a most-favored-nation status in trade and political relations, or goods’for which the country of origin is not identified and imported to the Belarus customs territory are subject to import customs duties at rates that are double the rates established by this Resolution.

29. Articles entering from and originating in developing countries enjoying preferential treatment are subject to import duties amounting to 75 percent of those set by the Resolution (for 104 countries), while articles entering from and originating in least developed countries enjoying preferential treatment by Belarus are not subject to customs duties (for 47 least developed countries). For articles originating in all other countries, or articles for which the country of origin is not established, the customs duty rates are doubled.

30. When articles entering Belarus under the conditions of free circulation are declared, import duties are paid before or at the moment of customs clearance of such articles.

F. Real Estate Tax 1

31. Real estate tax is paid by legal entities, including enterprises with foreign investments and foreign legal entities, as well as the subsidiaries, representative offices, and other structural subdivisions of legal entities possessing an independent (separate) balance sheet and a settlement (current) account, and also by participants in joint ventures that generated gross revenues from such activities, and by individuals. The tax levied on the value of productive and nonproductive fixed assets owned or possessed by the taxpayers, on the value of unfinished construction projects, and on the value of buildings belonging to individuals. The annual real estate tax rate is set at 1 percent for legal entities. The annual real estate tax applied to the value of residential buildings, garden sheds, and garages belonging to individuals, of buildings belonging to garage construction cooperatives and gardening partnerships established with private contributions from citizens, and of buildings used by unincorporated by entrepreneurs for their own activities is set at 0.1 percent.

32. Tax exemptions are granted to 17 types of assets including social and cultural facilities, productive assets of organizations belonging to societies for the disabled, facilities used for environmental protection, privatized apartments in apartment houses, dwellings and buildings belonging to old-age pensioners and certain categories of disabled persons, etc.

33. Since January 1, 1997, the real estate tax has been transferred in its entirety to budgets of the oblasts and the city of Minsk. Local Soviets of deputies have the right to grant concessions, and to set and change the due dates for the payment,

G. Land Tax

34. The tax is levied on land plots, possessed, used, or owned. The tax is paid by legal entities and individuals (including foreign ones) to whom land plots are granted for possession, use, or ownership.

35. The amount of land tax is determined depending on the quality and location of the land plot, and it does not depend on the results of the business or other activity of the landholder, the land user, or the landowner. The tax on land zoned for agricultural use is determined from data of the land cadastre. The tax is established in the form of annual fixed payments per hectare of land area.

36. Certain categories of citizens are exempt (including war veterans, old-age pensioners, disabled persons, and citizens who suffered from the disaster at the Chernobyl Nuclear power station).

37. Pursuant to Article 8 of the Law of Belarus “On the Budget of the Republic of Belarus for 2003,” in 2003, the total amount of land tax proceeds is subject to the transfer to regional budgets and the Minsk city budget.

38. In accordance with Article 46 of the Law of Belarus “On the Budget of the Republic of Belarus for 2003,” local governments have the right to increase (decrease) rates, grant concessions, and set and change the land tax payment due dates. However, the land tax rates for individual tax payers can be increased (decreased) by not more than two times.

39. Land tax on plots of land for temporary use, plots of land not returned on time, and illegally occupied land, as well as land plots exceeding the established space norms is levied at the rate 10 times higher than the standard rate.

H. Tax on the Use of Natural Resources

40. The tax is paid by legal entities, including enterprises with foreign investments and foreign legal entities, their subsidiaries, representative offices, and other structural subdivisions of entities with separate (individual) balance sheet and settlement (current) account, partners in a joint-venture agreement who are authorized to conduct joint business or who received a gain from said venture prior to its allocation, and individual entrepreneurs.

41. The tax on natural resources is levied on: (i) the volume of resources extracted from the environment; (ii) the volume of refined oil and petroleum products; and (iii) the volume of discharges (releases) of pollutants into the environment.

42. The tax consists of payments for exploitation of natural resources and for discharges of pollutants into the environment within set limits, for excessive exploitation of natural resources and for discharges of pollutants into the environment beyond approved limits, and for refining of oil and petroleum products.

43. The rates of the tax on the extraction of natural resources and on discharge of pollutants into the environment are set by the Council of Ministers of Belarus. For the refinement of 1 ton of oil product, the tax is levied at the rate of 1 euro. A tax of 15 times the base rate is levied for discharges of pollutants into the environment above the established limits. A tax of 10 times the base rate is levied for exceeding the established volumes of the extraction of natural resources.

44. Legal entities funded by the budget of Belarus are tax exempt. The tax is collected at preferential rates: (i) for water released for the commercial, drinking, and fire-fighting water supply of the public, and employees of enterprises, institutions, and organizations; (ii) for a sand and gravel-sand mixture for use in road construction; and (iii) for water used by fish breeding facilities and reservoirs, released to legal entities and individuals for the production of livestock-breeding and agricultural production.

45. In accordance with Article 8 of the “Law on the Budget of the Republic of Belarus for 2003,” in 2003, the total amount of tax on extracted natural resources proceeds (ecological tax) is subject to transfer to regional budgets and the Minsk cit budget. In accordance to Article 46 of the 2003 Budget Law, local governments have the right to increase (decrease) rates, set and change payment due dates for the payment of the tax on extracted natural resources except for the tax on oil, and on the extraction of table and potassium salt.

I. Contributions to Social Security

46. Contributions to the Social Protection Fund of the Ministry of Labor and Social Protection of Belarus are made by legal entities and individuals.

47. The following mandatory payments of social security contributions from the wage bill were established for employers and for cooperatives, enterprises, and companies under a collective form of ownership paying mandatory contributions on behalf of employees working under a labor contract:

  • for public associations of disabled persons and pensioners, and for enterprises holding full title to such public associations—4.7 percent; for residential, housing construction, and garage construction cooperatives not deriving income from their activity, and from gardening partnerships 5 percent;

  • for the bar association—5 percent;

  • for employers for whom disabled persons account for not less than 50 percent of the average listed number of employees—20.4 percent;

  • for economic agents engaging predominantly in agricultural production—30 percent; and

  • for all other employers (including with foreign investments and for citizens of Belarus)—35 percent.

48. Mandatory contributions are set in the following amounts for individuals and legal entities:

  • for entrepreneurs—15 percent of income;

  • for members of peasant (owner-operated) farms—15 percent of income;

  • for creative workers—15 percent of income;

  • for enterprises with foreign investments (for foreign citizens)—5 percent of the wages of foreign citizens; and

  • an insurance premium amounting to 1 percent of earnings is set for working citizens.

J. Payroll Contributions to the Chernobyl Fund

49. The emergency tax for recovery from the Chernobyl accident has been collected since 1991. The tax is of a temporary nature and is established by laws of Belarus on the budget for each calendar year. Since 1992, the base for the tax has been the payroll fund. In the “Law on the Budget of Belarus for 2003,” the emergency tax and mandatory contributions to the Employment fund were unified into a single tax at the rate of 5 percent (4 percent for the emergency tax and 1 percent for the Employment fund) of the wage bill with a single schedule of exemptions.

50. The taxpayers of the emergency tax are all legal entities, including foreign ones, their subsidiaries, representative offices, branch offices, and other structural subdivisions possessing a separate (individual) balance sheet and settlement (current) and other accounts, and partners in joint ventures agreements who are authorized to conduct joint business or who received a gain from said venture prior to its allocation, regardless of form of ownership, carrying out business activity.

51. Eight categories of enterprises and organizations are fully exempt (and three groups of organizations are partially exempt) from the payment of the emergency tax and mandatory contributions to the State Employment Fund. These include enterprises and organizations of certain categories of disabled citizens, collective farms, state farms, peasant (owner-operated) farms, interfarm enterprises and organizations, agricultural cooperatives, general-education schools, social and cultural enterprises and institutions, etc.

K. The Road Fund

52. The following are earmarked for the road fund:

  • the tax on the acquisition of motor vehicles, which are subject to mandatory registration;

  • user fees for motor highways;

  • deductions from profits from the operation of motor vehicles;

  • travel charges for heavy and oversized transportation vehicles on public-use highways;

  • tolls collected on the M1/E30 highway Brest—Minsk—border of the Russian Federation; and

  • unrequited capital receipts.

53. In accordance with the Article 24 of the “Law on the Budget of Belarus for 2003,” legal entities and their affiliations and subdivisions that have separate balance sheets, current accounts or an account abroad, participants in joint ventures that realized gross revenues from their operations are obliged to pay a single tax for the agricultural support fund and the road fund at the rate of 2 percent of sales of goods, labor and services (in the case of banks, non-bank financial organizations, excluding the National Bank of Belarus, this tax is on income net of expenditures on interests and fees and other banking expenses; in the case of trading, catering and service companies, the tax is paid on gross income, while insurance and reinsurance companies pay this tax on balance sheet profits). Each of the two funds receives 50 percent of collected revenues from this single tax.

54. Fees on income from operating motor transportation are paid by motor transportation enterprises and organizations regardless of form of ownership and business conditions, and by enterprises and organizations (except agricultural enterprises) possessing automotive departments and lease motor vehicles, in an amount of 2 percent of income from operating motor vehicle transportation.

55. Tax from sales of automobile fuel is paid by legal entities including entities with foreign investment, and foreign legal entities, subsidiaries, representative offices and other structural subdivisions of legal entities possessing a separate balance sheet and a settlement or an other bank accounts, entrepreneurs and parties of a simple partnership who are authorized to conduct joint business or received the gain from this business prior to its allocation, and who sell gasoline in Belarus.

L. Fund for the Support of Agricultural Producers

56. The Republican Extrabudgetary Fund for Support of Agricultural and Food Producers has been in operation since 1995. Since 1998, the fund has been a state earmarked budgetary fund. The income of the fund is formed by deductions made by all legal entities of Belarus and their structural subdivisions, regardless of the form of ownership, that have distinct (separate) balance sheets, settlement (current) accounts and other accounts, and certain parties to joint venture contracts in the amount of one percent of the proceeds from sales of products, work, and services. Budgetary appropriations for the payment of subsidies and price differentials are not taken into account when the amount of deductions to the above fund is determined. As mentioned above in the section on the road fund, the 2001 law on the budget merged taxes for the road fund and the agricultural support fund into a single tax at the rate of 2 percent.

57. Several groups of organizations are exempt from paying the single tax earmarked for the road fund and agricultural support fund. These include budgetary organizations, housing organizations, and enterprises engaging in construction, repairs, and maintenance of public-use highways.

M. Earmarked Budgetary Funds of Local Governments Used to Fund the Expenses of Maintaining Departmental Housing

58. On January 1, 1998, earmarked budgetary funds were created by local Soviets of peoples’ deputies to fund the expenses of maintaining public housing. As of January 1, 2001, according to the Law on the budget (Article 11), the tax earmarked for this purpose was unified with fees for earmarked budgetary funds of local governments for the stabilization of agricultural production, as well as the fees for the maintenance and repair of the housing fund. The unified tax was levied on all legal entities of Belarus and their structural subdivisions, regardless of forms of ownership, possessing an independent (separate) balance sheet and a settlement (current) account, and engaging in business. The tax was levied at the single rate of 2.5 percent of the sale of products, work, and services.

59. Collections from this fund are distributed as follows:

  • 40 percent to the earmarked local funds for the stabilization of agricultural production;

  • 20 percent to the earmarked local housing-investment funds; and

  • 20 percent earmarked fee for maintenance and repair of public housing.

60. Exemptions and preferences on this tax are analogous to the aforementioned single tax earmarked for Republican budget funds—the road fund and the agricultural support fund—levied at the rate of 2 percent on sales of goods, labor and services.

61. In accordance with the Decree No. 19 of the President of the Republic from July 19 to December 31, 2001, foreign legal entities carrying our entrepreneurial activity on the territory of Belarus are also subject to the taxes earmarked for the republican road fund and agriculture support fund, and local earmarked tax for local housing investment funds, maintenance and repair of public housing and local funds for stabilization of agricultural production.

N. Other Funds

62. The 2003 Budget Law, like the budget laws of previous years, allows the formation of innovation funds at the expense of deductions in the amount of up to 0.25 percent of the cost of goods and (or services), attributing them to cost.

63. The legislation allows increased rates of deductions to the innovation funds for certain organizations, starting from 0.5 percent for organizations that belong to the ministry of housing and communal services and up to 20 percent for organizations of the ministry of energy. However, the increased deductions to the innovation funds should not lead to the growth in prices and tariffs for goods and services.

1

Prepared by Roman Zytek based on the updates provided by the authorities.

2

21,6 MMW plus marginal tax rate.

3

75.6 MMW plus marginal tax rate.

4

123.6 MMW plus marginal tax rate.

5

183.6 MMW plus marginal tax rate.

1

It should be noted that legislation of Belarus uses the term “real estate tax,” not “property tax.”