New Year’s Gift For Belarusians: Government Coined New Tax

In the new year electricity and gas prices could go up by 20%.

It is to happen due to charging a value-added tax for these services to the population. And this novelty does not exclude other additional charges in utility payments, Belsat TV channel informs.

By Aliaksandr Lukashenka’s Decree №555, 2013, utility charges in Belarus could grow by no more than by $5 a year per a family of three in a two-room flat. Besides, each quarter payments are indexed according to the growth of the average wages on the country. And Belarusians are rather skeptical about the new tax.

“It will be a heavy blow for pensioners,” – a passer-by said.

“It really upsets me, as I have a low pension and low wages. It will be difficult for me to survive,” – the woman added.

Aliaksandr Lukashenka points at international creditors when speaking about growing utility services charges. It’s true, the IMF recommends to cancel the so-called cross-subsidization, when the state sells electricity to the population at a cheaper price, and to enterprises at a higher price. Due to that expenses of domestic enterprises for electricity are much greater than for their foreign competitors.

“As a result we have a kind of a layer-cake. As there are such economic entities that have benefits as well: those who grow vegetables for cities in greenhouses and frames, fertilizers plants…” – an economist Mikhail Zalesski said.

In the utility bills received by us every month it is said that we pay only one fourth of the utilities costs, and the rest is subsidized by the state for us. However, two years ago even Aliaksandr Lukashenka said that figures in utility bills are unreasonably high, and in reality people almost cover costs of utility services, considering cheap energy commodities received by Belarus from Russia.

“They say 60% should be covered, and it is not so for today. And I would say that we already have 70%, as I do not know utility rates, and it seems to me that price cost had been overpriced there,” – said the ruler.

Now Belarusians pay 5 Eurocent for kilowatt-hour. And in Lithuania, which buys Russian energy resources at a considerably higher price than Minsk, electricity which is not subsidized, cost 12 Eurocent, which is twice cheaper than the product cost, indicated in Belarusian utility bills.

Experts explain that Belarusian entities of the housing and utility sector include all operating and inappropriate expenses to the production cost of their services, among other things – as it was in Babrujsk – when the water service company bought a cruiser.

The State Control Committee detects inappropriate expenses from time to time, criminal cases are initiated. But the authorities refuse to liquidate the public monopoly on providing utility services.