Belarus has estimated the losses from the tax maneuver in a negative scenario

© AFP 2018 / Victor DrachevНефтеперекачивающая station in Belarus. Archival photoBelarus has estimated the losses from the tax maneuver in a negative scenario© AFP 2018 / Victor Drachev

Losses of Belarus from the tax maneuver in the oil sector of Russia during the period of the project will amount to 10 billion dollars in case the parties fail to agree on compensation to the Belarusian budget and within Belarus are not taken compensatory measures, said Deputy Finance Minister Andrei Balkovec.

«If we talk about the most negative scenario, when (with Russia — ed.) no decision reached… we begin to bear some losses as part of the budget in the form of drop-down customs duties when exporting oil and oil products, and in view of the deterioration of the economy refineries», — said Balkovec at the conference BelarusCrossway’18, a video which is posted on her Youtube channel.

«Global losses, if nothing changes (in the Republic — ed.) and tax maneuver, within 6 years of the implementation of this tax maneuver… — about $ 10 billion. Of them $ 3 billion — the shortfall in budget revenues (shortfall of export duties — ed.), $ 6 billion — a deterioration of the economies of the two refineries. But if it is not to change anything», — said the representative of the Ministry of Finance.

At the same time, he noted that «this will not happen». «Will introduce certain compensatory measures. The plants will not be so many (oil — ed.) to revise, significantly, imports fall. Negative impact on the economy of plants will be minimized… the Loss of budget revenues will be compensated for, mainly through spending cuts (budget — ed.)», he continued.

Balkovec noted that the implementation of the tax maneuver and the lack of agreement with Russia on compensation «processing (oil) becomes unprofitable, there is no sense to process such volumes, it makes no sense to import 24 million tons of oil, which can be recycled (in Belarus — ed.)». He explained that for the domestic market of Belarus has enough processing 6 million tons of imported oil plus the volume extracted in Belarus.

Balkovec added that the major sources of growth of budget revenues is not visible. He noted that from January 1 will enter into force the new Tax code, which introduces a moratorium on the introduction of new taxes and increasing the rates of existing. In addition, the Deputy Minister said, increasing the tax burden on business will not lead to growth of budget revenues, and to care of business in neighboring Russian regions or in the «gray» zone. «A source that would replace lost income from the export of oil and oil products, now in the moment simply no. Therefore, the Belarusian side has taken a tough stance in negotiations with Russia», — said Balkovec.

«The understanding from the Russian Federation is that it can not be a unilateral decision, the tax maneuver without any consideration of the interests of Belarus. How it is implemented — now in active discussions,» — said the Deputy Minister.

He noted that Belarus is in the draft budget for 2019 compensation from the Russian Federation is not laid, «realizing that this process is slow and is unlikely to be decided in the coming weeks».

Balkovec expressed confidence that «the decision (on payment of the Russian Federation to the Belarusian budget — ed.) will be taken: all parties understand that.» According to him, the decision of the Russian Federation about the tax maneuver does not fit into the idea of the EEU, because inappropriate «Union in which one country defends its own interests, others must agree.»

In Russia in the years 2019-2024 of the planned implementation of so-called tax maneuver, which involved a gradual zeroing of export duties on oil and increase tax rates. Additional costs in Belarus arise from the expected increase in oil prices from Russia and reduction of export duties on oil products. In October, Prime Minister of Belarus Sergei Rumas said that a mechanism to compensate Minsk for losses from the implementation in the Russian tax maneuver must be determined before the end of the year. According to Rumas, the Russian side suggested that it was the inter-budget transfers, Belarusian considers to be more correct fixing of the compensation in the price of the resulting oil.