Russia-Belarus talks on compensating for tax maneuver put on hold

Russia-Belarus talks on compensating for losses due to the tax maneuver have been put on the back burner since the work on coordinating the program of the implementation of the union treaty is underway, Deputy Finance Minister Dzmitry Kiyko told journalists on Friday.

“For the present, the question has been put on hold. We are now working on improving the program of implementing the union threaty. We expect that the process of negotiating other topical issues will be activated as soon as the program has been approved by the parties,” news agency Interfax quotes the top official.

According to him, the losses are being calculated in Minsk.

“We will take them into account when planning budget revenues. Correspondingly, when Russian Federation and us get ahead in negotiations and there are certain decisions on possible compensation, it will also be factored in,” the deputy minister stressed.

It is easy to conclude how much Belarus would lose on the tax maneuver, Kiyko said:

“Last year we said that it was about 600 mln rubles (or $300 mln). All depends on what oil price is taken for calculations. When we talk about the basic parameters, i.e. not more than $60 per barrel, the total sum of our losses will amount to $300 mln. If oil price changes, the loss will be more or less, respectively.”

Russia counts on completing the tax maneuver by 2025. It provided for a gradual zeroing of export duties on oil and an increase in the tax on the extraction of natural resources. The tax maneuver is not in the interests of the Belarusian budget, since it entails an increase in the price of oil for Belarus. This will result in the Belarusian refineries receiving raw materials at world prices and losing their advantages over competitors outside the Eurasian Economic Union. According to Belarusian Finance minister Maksim Yermalovich, Russia’s tax maneuver is likely to result in Belarus’ losing BYN 630 mln in 2019 and $8-12 bn by 2024 unless the problem is resolved through negotiations and compensations are awarded.

World Bank says Russian tax maneuver may cause recession in Belarus


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