The Belarus budget 2012 will adhere to a tight fiscal policy and attempt to keep a consistent exchange rate in relation to foreign currency. The basic emphasis will be on creating a budget without any deficit. Mikhail Myasnikovich, the Prime Minister of Belarus, expects that in 2012 there will be a limited but well-balanced economic development.
Highlights of Belarus Budget 2012
The national government will focus on domains such as internal pricing control and fiscal instruments as part of its economic development process.
Belarus budget 2012 aims to achieve balanced and sustainable economic growth and also stabilize the currency market.
Deductions are expected in areas like gross saving and final consumption expenditure.
It is anticipated that these steps will help in the reduction of overseas trade deficits and increase net export.
The reduction in material intensity is expected to be 3 percent.
Gross output costs are also supposed to go down in 2012 so that Belarusian products can perform better and GDP growth can be encouraged.
In 2012 Belarus will look to increase its export by 10.6 percent.
The manufacturing industry exports are estimated to amount to $7.5 billion.
The Belarus government is expecting sectors such as woodworking, agriculture and regional resources to do well in 2012.
In the upcoming fiscal sectors such as technology, equipments and machinery will receive majority of the investments.
The national government has hinted that in 2012 it will alter tax rules so that companies can save an additional amount of 2 trillion Belarusian ruble, which can be invested for their growth.
The 2012 budget is expected to focus more on social development with special emphasis on sectors like health and education as per Andrei Kharkovets, the Finance Minister.
Several measures have been suggested for improving management of taxes, regulating new prices and rates.
Belarus will also aim to encourage production of high-end technologies and lower the taxes to be paid by small and medium sized enterprises.
Income tax could be brought down to 18 percent from 24 percent. This is expected to assist companies save up to 5.6 trillion Belarusian ruble this amount can be used for purposes like procuring extra resources.
Profit taxes could be reduced to 18 percent from 24%. This proposal has the support of Alexander Lukashenko, the President of Belarus.
Belarus will also assist companies focusing on import substitution and innovations.
Belarus budget 2012 will focus on maintaining a consistent rate of currency exchanges, external debt servicing on a timely basis and low inflation rates.
Consistent operation of the consumer and currency markets are top priority in 2012 fiscal and the government has stated that every plan needed to achieve these targets should be implemented unconditionally.
The Belarus budget 2012 has been planned in accordance with the standby program, which the national government initiated by taking a EurAsEC Bailout Fund loan.
As per Kharkovets the budget is also in line with IMF principles, which can later on help Belarus start a partnership with the global body.
The consolidated budget projects that in 2012 Belarus will be earning revenues worth Br 138.9 trillion but the structure of budget revenues will not change in the upcoming year.
The finance ministry has suggested that innovative products be kept out of income taxes so that exports can increase and the market becomes more competitive. This can be done if the tax code in Belarus is modified.
In 2012 taxpayers will also be able to opt for a particular schedule for making their payments it is expected that this step will create a simpler system of taxation.
Expectations from Belarus Budget 2012:
Economic experts have stated that Belarus export target for 2012 fiscal is a tough one. This is being said in spite of the fact that Belarus has aimed to take up the industrial contribution in GDP to 34 percent, which will mark an increase of 2.1 percent.
The Prime Minister of Belarus has stated that recently Belarusian companies have been performing really well and he expects that their net profits will go up by 2.5 times in 2012 fiscal.
The national government is also anticipating that companies will get better at financial management in 2012 and they will invest more in innovative programs in the upcoming fiscal.
The Finance Ministry opines that the projected budget has sufficient financial resources to deal with monetary obligations both in and outside Belarus. It is expected that the 2012 Belarus budget will be helpful in stabilizing the country s fiscal set-up.
Belarus has a tax system that is comparable to the top countries around the world and the 2012 budget will look to take it up by few notches. It is looking for a 6 percent decrease in income taxes by bringing it down to 18%, which will be among the lowest in Eastern Europe and the Customs Union.
Kharkovets, however, feels that the present tax benefits need to be substituted by simpler mechanisms that can promote investments. He expects that in 2012 majority of the revenues will come from the following areas:
Value added taxes
Profits accrued from overseas fiscal operations