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Opinions & Interviews

22 Dec 2017

Belarus president encourages private business development in small towns, countryside

Belarus president encourages private business development in small towns, countryside

MINSK, 22 December (BelTA) – It is necessary to more actively develop private business in small towns and the countryside. Belarus President Alexander Lukashenko made the statement as he met with representatives of the Belarusian business community on 22 December, BelTA has learned.

The head of state spoke at length about the development of retail and services sphere in the countryside and about efforts to improve the self-employment of citizens. He said he was concerned about small and medium private companies focusing primarily on the nation’s capital and some other more or less large cities. “If we talk about services sphere, I can understand it. The more people there are, the better retail is and other services,” said Alexander Lukashenko. “But if we talk about manufacturing, you are better off setting up enterprises in the regions where workforce is cheap, where spare lands are available and resources are at hand. Besides, tax preferences are available over there, including lower tax rates, lower customs duties, and more relaxed regulations on export trade.”

According to the head of state, not everything is so simple elsewhere, too. The number of shops in rural areas has been dropping for the last few years. In 2012-2015 their number dropped by 10%. Low customer numbers in consumer service outlets and public catering outlets cannot keep these companies in the black. Buildings that used to house shops, restaurants, or tailor shops several years ago are now empty husks.

“We should seriously think about rural Belarusians and the quality of their life,” stressed Alexander Lukashenko. Those, who live in agrotowns, are guaranteed solid social standards but even those are a bare minimum. These days people need quality home repairs, repairs of household appliances, need hair done, clothes made, and need many other things. “Small business can do that. But the relevant conditions and affordable prices for services in the countryside are a must,” Alexander Lukashenko was convinced.

The presidential decree on developing retail, public catering, and consumer services has everything necessary to reduce costs of doing business in rural areas. Value-added tax is not applicable there and VAT makes up about 20% of the price. Profit tax is only 6%, which is three times below the general rate. Land tax and real estate tax are not collected.

“Local authorities will be the ones to determine where these regulations will apply. A wise approach is needed. We don’t want a tax haven just beyond the border of Minsk or an oblast capital. We didn’t design the relaxed regulations with that in mind,” said Alexander Lukashenko. “By the way, if foreign companies decide to use the relaxed regulations in remote areas, for instance, from Russia’s Bryansk Oblast, Smolensk Oblast, from Lithuanian or Ukrainian regions, we will only benefit from it. It is important to keep the countryside alive.”

The Belarus president invited participants of the meeting to speak up what else needed to be done to encourage private businesses to more actively explore small towns and rural areas. “People may not even have to register as self-employed businessmen right away since the step entails serious commitments. Just working to see whether his or her services are in demand may suffice initially. The decree on regulating activities of natural persons takes care of that,” noted the head of state.

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