Officials try to dispel mounting fears over new taxation rules in trade with Russia :: Charter'97 :: News

Belarusian officials on Tuesday attempted to dispel mounting fears that a new procedure of collecting value-added tax may hit trade with Russia and lead to the restoration of customs controls at the shared border. Vasily Dolgolyov, Belarus’ prime minister/presidential representative to Russia, described the absence of customs controls at the border as one of the major achievements of the integration process, which he said creates favorable conditions for bilateral trade. “We are projecting an ambitious volume of trade with Russia this year, although we realize that taxes will be deducted from it,” the official told reporters in Moscow on January 25. “Not only do we want to make up for this decline but we also plan to achieve a growth of 10-11 percent,” the press office of the Belarusian embassy in Russia quoted him as saying.

Mr. Dolgolyov linked January’s slump in bilateral trade to the confusion about the new taxation procedure and expressed certainty that the situation would be back to normal soon. “This new phase of cooperation will allow Belarusian and Russian companies to offer their products at a more competitive price,” he stressed.

The country-of-destination principle in the collection of commodity taxes has long been applied in Belarus’ trade with countries other than Russia, said Belarusian Tax Minister Larisa Kondratova. The only novelty is that commodity taxes are collected not by customs but by tax authorities, she noted, adding that this procedure requires less time and fewer bureaucratic formalities.

The minister reportedly played up the level of cooperation between the two countries’ tax authorities, which she said makes it possible to prevent tax evasion. “That’s why all misgivings expressed by companies over the application of the agreement on the collection of commodity taxes in trade between Belarus and Russia are needless,” the official stressed.