‘Business should be transparent in the country: both state and private’
From January 1st, 2016, all entrepreneurs in Belarus will be working under equal conditions
Entrepreneurs involved in trade have their own circle of customersA related Presidential decree envisages that, from July 1st, 2014, all individual entrepreneurial retail traders paying a single fixed tax should have the necessary documentation for goods, confirming their purchase. A transition period was set up for this category of entrepreneurs, until March 1st, 2015, allowing the sale of goods without corresponding documents on the basis of inventorising remaining goods, for submission to the tax body by July 30th, 2014. From the final quarter of last year, entrepreneurs began to address various institutions with the problem of remaining goods being disqualified from sale after March 1st, 2015 (lacking the necessary documentation from sellers in Russia to confirm purchase and guarantee quality and safety).
According to entrepreneurs, the current economic situation is the main reason for the presence of large stocks of unsold goods. Moreover, conditions are unequal, since foreign citizens have the right to trade a wide range of light industry goods at our markets and trade fairs.
The Head of State recently visited Expobel shopping and entertainment centre in Minsk, chatting to entrepreneurs, whom he assured of his desire to find a compromise of interests: between individual entrepreneurs, those who provide them with trading space and those involved in light industry.
The President continued his discussion of entrepreneurial issues at a session attended by representatives of small business, including from the regions. Mr. Lukashenko underlined that, over the last year, some individual entrepreneurs have fulfilled requirements set out by the state, starting to use transparent methods of work. However, not all followed this example.
The President also expressed confidence that individual entrepreneurs ‘should be involved in normal transparent business which guarantees equal conditions for all participants’. He commented, “The main thing is that they should work in conjunction with Belarusian light industry, selling Belarusian-made goods. As far as business is concerned, competition under equal conditions (regardless of the form of ownership) is the main priority.” Today’s situation is that some individual entrepreneurs work transparently while others don’t accept the new business terms envisaged by legislation.
Representatives of the business community present at the meeting supported Government proposals, expressing their wish to see the gradual launch of innovations.
Summing up the results of the discussion, the President stressed that, from January 1st, 2016, all individual entrepreneurs will work under equal conditions. “There will be no respite! We’ve given enough as it is,” said the Head of State. “Nobody will work without documents in Belarus!”
The President urged individual entrepreneurs to use more civilised methods of work, without waiting for January 1st, 2016, when no light industry products will be eligible for sale without corresponding documents confirming their purchase. “It’s not good when traders are selling undocumented goods. Therefore, sooner or later, we’ll introduce these requirements. Do not wait for January 1st: start right now!” added Mr. Lukashenko.
Mr. Lukashenko also suggested that individual entrepreneurs join efforts to set up SMEs on transparent terms, emphasising that the Development Bank and the World Bank are ready to provide assistance. He noted, “There’s only one way. If you want to be businessmen, shift to a normal style of work.” The Head of State guaranteed that businessmen will be given support and protection within the Customs Union.
A brief summary can be made: dialogue between the state and individual entrepreneurs regarding the technical requirements of the Customs Union for light industry goods has been delayed, resembling conversation between a tolerant parent and a stubborn child. The parent has no wish to punish yet the child is slow to gain understanding of the difference between right and wrong.
To the theme
Valery Borodenya, member of the Standing Commission for Budget and Finance, of the House of Representatives:
Entrepreneurs yet to adapt to new conditions shouldn’t expect to see the terms extended. They need to plan their business transparently, while remaining competitive.
Georgy Grits, Deputy Chairman of the Belarusian Science and Industry Association:
The Government’s term extension was another step in helping smaller businesses. However, the need for certification regarding the sale of light industry good (confirming their quality) is not unique to Belarus; the whole Eurasian Economic Union is following the same path.
The term allowed for the sale of remaining goods without the necessary documents has been extended several times, with the last expiring on March 1st. Theoretically, after this date, corresponding way bills, certificates and other necessary documents should be available at every trade pavilion and market. However, this long-announced measure appears to be ‘unexpected’ for around 18,000 entrepreneurs (out of more than 50,000) and, now, they are anxious.
Of course, it’s easy to appreciate entrepreneurs’ point of view since individuals may need to act not only as director and accountant, but as driver, forwarder, loader and cleaner. On the other hand, most entrepreneurs have managed to shift to the new manner of working, showing that all is possible, as noted by the President in his conversation with Expobel individual entrepreneurs.
It is only fair that everyone is treated in the same manner, as stressed by representatives of large businesses during the session, which featured heads of large companies. Many of the foremost businessmen countrywide began by trading at the market and they are unanimous in agreement that rules should be clear and equal for everyone; otherwise; the engine of business — competition — is destroyed.
If Russian wholesalers don’t provide documents, goods may appear within the Customs Union in a covert fashion. As the President notes, in ignoring technical regulations, traders partake in legalised smuggling. Can a responsible leader of the country allow this? Entrepreneurs who pay a single fixed tax rate are allowed to sell the remainder of goods without documents until January 1st of next year but will need to pay more money to the state: a fixed value added tax will be levied across several stages, to allow traders time to adjust.
By Vladimir Khromov