OREANDA-NEWS. July 28, 2010. The Belarusian Finance Ministry considers reducing the rates of the profit tax, value-added tax and transfers to the Social Security Fund in the medium term, the head of the tax policy and budget revenues department with the Finance Ministry, Dmitry Kiyko, told a news conference.

“In the medium term [2012-2015], we consider cutting the profit tax rate. We believe a 20% rate is real for Belarus [it currently stands at 24%],” he said.

By 2015, the ministry plans to start phasing down the rate of transfers to the Social Security Fund, abolish the right of local councils of deputies to impose multipliers on local real estate and land taxes. Also in 2013-2014, the ministry may reduce the VAT rate.

Kiyko said a new taxation system measuring up to international standards would come into effect in 2011. It will include five groups of taxes: the consumption tax [VAT, excises], profit and income tax, property tax, social payments and the environmental tax.

Besides, starting 2011 it is planned to abolish the tax on services and transfers for land development and simplify the payment of the environmental tax by excluding it from the group of three mandatory payments. It is also planned to change to quarterly payment of the profit tax with annual declaration.

“In 70% of all cases [profit tax] payments are made monthly. Declarations will be produced in March with indications of the sum of profits for the current year, based on previous year’s statistics or forecasts. Companies will thus be spared current profit tax accounting,” Kiyko said.

Besides, it is planned to cancel down payments of the VAT and excises [six payments every month now].

“To encourage investors, we plan to broaden the possibilities of applying profit tax remissions provided profits are spent on capital investments without linking them to the depreciation fund. It will be possible to have benefits for only 50% of the entire amount of profit,” though, he said.

The amendments to tax policies will push Belarus up the WB’s Doing Business rankings, the official believes.

“We hope to move up because we improve the required indicators. We will cut the tax rate in 2011 by abolishing some taxes, and the number of payments will be cut because of the change to the quarterly basis,” he said.

According to him, Belarus might make it to the top-100 by the ease of paying taxes [from the bottom 183rd position], which is the level of developed countries. “This will push us into the top-30 economies by the overall ease of doing business,” he added.