The report does make reference to some plans and actions by the authorities following the IMF mission, but the staff was not in a position to assess the outcome and implications of these measures.
Discussions on fiscal transparency were held in Minsk during April 21–30, 2003. The staff team comprised Messrs. Eivind Tandberg (Head) and Dimitar Radev (both FAD), and Roman Zytek (EU). The mission met with officials from the ministry of finance (MOF), ministry of economy (MOE), ministry of statistics (MOS), and ministry of agriculture, the National Bank of Belarus (NBB), representatives of both houses of Parliament, the State Control Committee (SCC), the Social Protection Fund, the Minsk City Council, Magilevskaya Oblast, Shklow, Belarusbank, and the Institute of Economy, as well as representatives of civil society.
Examples of other extrabudgetary funds are the Fund for the Development of Construction Science or the Stabilization Fund of the ministry of posts and telecommunications.
General government consists of the following entities: the presidency, parliament, cabinet of ministers, 24 ministries, a number of state committees and agencies, six regional (oblast) and Minsk city governments, 118 districts (rayons) and 110 rayon-level cities and towns and 25 district cities and towns, 103 semi-urban centers, 1,455 rural councils, and 24,117 rural settlements, and the SPF. The Belarusian Parliament (called the National Assembly) comprises two houses - the House of Representatives (lower house with 110 Deputies) and the Council of the Republic (the upper house with 64 Deputies).
Paragraph 35 of the Law on the 2003 Budget provides a detailed list of ministries, committees, and organizations that do not include in the republican budget revenues from various activities, such as sale of assets, including real estate, and provision of paid services.
The SPF is included in the general government budget in 2004.
Concept Paper on the Management of the State Property in the Republic of Belarus for 2001–05 adopted by the government (Decree of the Council of Ministers (COM) No 1240 of August 10, 2000).
In the Belarus statistical system, wholly-owned government enterprises are classified as private sector following corporatization.
47 percent of the privatization vouchers issued during April 1, 1994–January 1, 1997 have not been redeemed for shares so far, despite the fact that the vouchers expired on June 30, 2003.
The activities of the NBB are regulated by the Banking Code of October 25, 2000. In particular, Chapter I para. 7 defines the role and functions of the central bank, and Chapter II (National Bank) contains detailed regulations for central bank activity.
As part of Belarusian commitments foreseen in the agreements on the monetary union with Russia, the government has been preparing amendments to the Banking Code that, when implemented, will increase the independence of the NBB and the banking sector from government intervention. The amendment will also explicitly prohibit central bank direct lending to the government, including the purchase of government securities in the primary market.
The 2004 Budget Law stipulates securitization of NBB’s holdings of loans to the government.
For example, Minsk restaurants have to comply with regulations setting explicit limits on profit margins.
The pay scale was introduced as a measure to strengthen tax compliance by reducing opportunities and incentives for underreporting labor compensation to lower social security liabilities.
Summary information on the developments in the privatization area as well as some data on state shareholdings in Belarus corporations are published on the MOE’s website www2.main.gov.by.
Law on Budget System and State Extrabudgetary Funds of June 4, 1993.
Law on Budget System and State Extrabudgetary Funds of June 4, 1993.
Constitution of the Republic of Belarus.
Constitution and Law on the President of the Republic of Belarus.
Decree of the COM No. 1346 on the Procedure for Generation and Disbursement of the Proceeds of the Innovation Funds, September 30,2002; http://mail.ncpi.gov.by:8081/webnpa/text.asp?RN=C20201346.
In 2004 the SPF is included in the general government budget.
The Law on the 2004 Budget stipulates the innovation funds rate of 0.25 of total costs. The government has the right to set higher rates for different ministries (up to 20 percent). In addition, the draft 2005 budget stipulates that innovation funds will be included in the general government budget and their transactions will be performed via the state treasury system in accordance with budget legislation of the Republic of Belarus.
Law on Taxes and Revenues collected by the Budget of the Republic of Belarus, December 20, 1991.
Decree No. 11 of the President of the Republic of Belarus of April 19, 2002 prohibited extending tax and customs exemptions and discounts to legal entities and individual entrepreneurs starting January 1, 2003.
The General Part of the Tax Code became effective starting 2004, except for some stipulations that will be enforced together with the special part of the tax code, that is under development.
Decree of the President of the Republic of Belarus No. 29 of July 26, 1999 on Additional Measures to Improve Labor Relations and Strengthen Labor and Performance Discipline.
Budget Law 2003; Decision of the COM of February 6, 2003 On the Transfer of the part of Resources received from rents of Republican Property into the Republican Budget; Decision of the COM of December 21, 2002 (with subsequent amendments) On the Approval of the Social Protection Fund Budget of the Ministry of Labor and Social Protection.
The government has reduced the extent of cross-subsidization in the utilities and house maintenance sector over the past two years. However, there was little progress in improving cost efficiency of state-owned utility monopolists. There are real risks for a reverse cross-subsidization to emerge if the government continues to set different, economically unjustified, utility rates to different groups of customers to lower production costs of unprofitable enterprises.
Since 2002 the MOF has been maintaining a registry of local government debt issuance, which covers all their commitments. Since 2004 a limit on the guarantees that may be issues by local governments is established as a percentage of the expenditure side of the relevant budgets.
Since 2004 aggregate data on external and internal debt are posted monthly on the website of the MOF http://ncpi.gov.by/minfin/SDDSr/SDDR_Eng.htm no later than 30 days after the end of the reference month.
The MOF is planning to start compiling the economic classification of the accounts of the general government on a monthly basis in the near future.
Government Finance Statistics manual, IMF 1986.
Article 21 para. 4.
The 2003 budget was presented on November 14.
Starting 2004, privatization receipts are reflected as budget deficit financing item.
Ministry of Taxes and Levies.
The MOF accounts and prepares separate statements on Innovation funds, SPF, and extrabudgetary funds of budget organizations. The draft 2005 budget stipulates that the transactions of the innovation funds will be performed through the treasury in accordance with budget legislation.
The treasury is working to resolve certain information security issues to allow for the inclusion of these institutions in the treasury system.
Law regarding the SCC of the Republic of Belarus, January 31, 2000.
Law on State Statistics, February 17, 1997, No 18–3.
Starting 2004, the SPF is included in the general government budget.