Opposition Proposes Reform of the Budget/Taxation System :: Charter'97 :: News

Analytical center of the United Civil Party prepared an analysis of the project of the national budget of Belarus for the year 2002, as well as proposed amendments into the reforming of the budget/taxation policy of the country. The concomitant offers were forwarded on November 13 to the Prime Minister Gennady Novitsky and head of Lukashenko’s administration Ural Latypov. It’s hard to tell at this point whether the UCP’s initiative will be a success at all, for Belarus preserves the unique center of passing economic decisions, consisting of the government, leading industrial enterprises and legislative. The content of the so-called official budget project for 2002 manifests the character of the planned economic policy next year. Although after the presidential elections the country’s top officials numerously promised swift liberalization and market reforms, the budget policy in Belarus remains closed, not transparent and uncontrolled by the public and the voters.

The Ministry of Finance doesn’t have enough of the constitutional independence in order to define the basic parameters of the budget and tax policies. It is the executive, which sets the frames, imposes its plan, defines the share, percentage and involvement of various structures. The only thing left is a purely mathematical procession of data. A human being as an economic entity is driven outside the framework of the proposed budget scheme, which is especially true of the most needy folks.

As a result of such secrecy, the consolidated and national budgets describe only part of the profits and expenses of the state. Many expenditure provisions remain confidential, which doesn’t allow to evaluate the effectiveness of the government’s operation, that of the presidential administration and other structural subdivisions. The tax system remains utterly complicated with dozens of privileges for unprofitable sectors, economic entities and regions. The executives at all levels have too wide authority. Moreover, expenses under the budget aren’t concentrating on the programs of helping the poor strata of the population. Hundreds of structures get the means, thus making the state machine overly complex and costly for the tax-payer.

According to the analysis, the Belarusian economy doesn’t possess enough resources to lift real incomes of the population, as planned by the government. The state will still pursue the policy of ousting private investments through the artificial decrease in the cost of resources that are solely available for the state bodies and the privileged institutions. The government has no plans of privatizing the real economic sector and the banking system, necessary for the formation of a solid base of long-standing non-inflation economic growth.

Apparently, the draft budget 2002, prepared by the government, doesn’t fit in the scale and composition of the acute social-economic issues, facing the country. Preparation of the new law is a time-consuming procedure. In this regard, the UCP suggests that the state institutions deny passage to the law “On budget of the Republic of Belarus 2002” and by March 15 work out and ratify a principally new budget law with different key provisions. This has to be a budget of the transition period, which will take into full consideration the absence of the natural informational economic field in Belarus, absence of natural manufacture structure, market system of motivating economic entities under the conditions of strong administrative regulation, absence of a de-facto single economic space with Russia. Also needs to be taken into account the necessity to create a competitive taxation system, based on the international accountant’s and financial standards, with the help of which one could cardinally change the business climate in Belarus, the necessity to decrease state’s expenses on administrating the tax system, the need to stick to the international norms on the transparency of budget expenses, which is especially true of the military expenditures. The scientific analytical center introduced concrete and detailed suggestions as to the reforming of the profits/expenses spheres in the budgets, worked out basic directions of the budget reform and those of the reform of economic management system. The full text of the draft national budget is available in Russian at http://www.ucpb.org.