Visit to shopping and entertainment center Expobel

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Starting from 1 January 2016, all market vendors in Belarus will work in equal conditions, President of the Republic of Belarus Aleksandr Lukashenko said after the session held on 17 March to discuss the regulation and development of certain types of business activity and the meeting with businessmen.

The head of state visited the shopping and entertainment center Expobel where he talked to market vendors.

According to Aleksandr Lukashenko, he would like to balance the interests of market vendors, those who provide them with trade space and the light industry.

“You have no certificates of quality, you have no transparent business,” he said. According to Aleksandr Lukashenko, he understands that certificates of quality are not the number one problem.

“I am more concerned about the fact that we, as a state, are losing transparent business and destroying our industry. This is inadmissible,” the President said.

“Both public and private business should transparent. We should create equal conditions for all,” Aleksandr Lukashenko stressed.

The President expressed concerns regarding the domestic light industry, stressing that its products lose competition to the goods brought by market vendors to Belarus from abroad.

Aleksandr Lukashenko suggested engaging self-employed businessmen in the process of overhauling the light industry. “It is a good option as there are a lot of tanning, footwear, sewing and textile companies. Investments and creativity are needed there,” the head of state said.

The President continued the discussion of entrepreneurship issues at the session attended by the representatives of small business, including from the regions.

“We have discussed a lot of issues today, including together with market vendors. Everyone has certain ideas. But unfortunately, for the past decade we have had to discuss the work of market vendors. Decree No. 222 was passed last year after the session with the President and additional discussion with businessmen.

According to Aleksandr Lukashenko, he was told that last year a half of market vendors fulfilled the requirements set out by the state and started to use transparent methods of work. However, not all of them did it.

“Back then they asked for an opportunity to sell the rest of goods. The same is happening now. They mention difficulties with sales, issues with Russian traders who do not provide necessary documents, high prices, poor product range, low quality of goods available in Belarusian wholesale stores. They say that our partners in the Eurasian Economic Union do not oblige their self-employed businessmen to observe similar norms. As a result, Belarusian businessmen are in unequal conditions,” the President noted.

Aleksandr Lukashenko said that all the opinions should be taken into account. The head of state pointed out that the government should answer a number of questions in the presence of market vendors, their representatives. “Firstly, what ways of settlement of this business issue do you suggest? Secondly, will the interests of all the parties concerned, including the state, market vendors, and consumers, be taken into consideration?” Aleksandr Lukashenko wondered.

He believes that “neither domestic market, nor jobs, or the flow of tax payments to the state budget should be affected.”   

We should listen to the market vendors and consider their ideas on how we can settle the issues they have raised. After that we will make decisions about the future of this type of business activities in our country,” Aleksandr Lukashenko pointed out.

At the same time he noted that people should not suffer from such disputes.

“The main thing is the human factor. People should not suffer. It is essential to handle these issues carefully without doing harm to people. All of them have families. The moral factor should be the main priority,” the head of state stressed.

The head of state also expressed confidence that market vendors should be involved in normal transparent business which guarantees equal conditions for all participants. The main thing is that they should work in conjunction with the Belarusian light industry and sell Belarusian-made goods.

“As far as business is concerned, competition in equal conditions regardless of the forms of ownership is the main priority,” the head of state believes. Today the situation is as follows: part of market vendors work in transparent conditions, the other part does not accept new business terms envisaged in the legislation.

First Vice Premier of Belarus Vasily Matyushevsky informed the head of state about the proposals of the government developed jointly with the business community concerning the amendments and addenda to presidential decree No. 222 of 16 May 2014. The decree regulates entrepreneurship and sale of merchandise by self-employed businessmen and other natural persons. The draft document allows self-employed businessmen, who pay the single tax, to sell merchandise without the documents that confirm the purchase of the merchandise. At the same time the draft document suggests increasing rates of the single tax. The document also suggests introducing an exhaustive list of merchandise that foreign citizens are allowed to sell via marketplaces or other outlets. These measures are designed to equalize rights of foreign citizens and Belarusian ones, noted the First Vice Premier. They will contribute to the establishment of equal conditions for selling merchandise by natural persons, who are not involved in money-making operations.

Vasily Matyushevsky pointed out that if market vendors, who pay the single tax, are allowed to sell their merchandise without the documents that confirm the purchase of the merchandise, the terms will not be equal to the terms of Belarusian manufacturers of similar products and importers of similar products. In order to avoid giving preferences to trade in questionable-quality merchandise and to address the unequal terms of retail business, the tax burden for payers of the single tax has to be adjusted. In particular, the tax burden can be increased by 50%, market vendors may be asked to pay fixed VAT as large as 400% of the single tax rate in addition to paying the single tax.

Suggestions have been voiced to address the unequal competition terms of Belarusian manufacturers and official importers by economic methods. In particular, the tax burden can be raised annually: the fixed VAT can be increased up to 500% of the single tax rate as from 2016 and up to 600% as from 2017.

“Thus, market vendors will know in advance rules of the game for the short term,” believes Vasily Matyushevsky. On the whole, the amendments and addenda will contribute to higher tax revenues, stabilization of the situation in the entrepreneurship environment, and the enabling of a smoother transition of market vendors to transparent and civilized forms of work.

Representatives of the business community who were present at the meeting supported the proposals od the government.

To sum up the discussion, the President stressed that starting from 1 January 2016 all market vendors will work in equal conditions. Belarusian market vendors will be able to sell light industry goods without documents that confirm their acquisition till 1 January 2016.

“There will be no more respites! We’ve been giving enough respites as it is. Nobody will work without documents in Belarus!” the head of state said.

The President urged market vendors to use more civilized methods of work without waiting for 1 January 2016 when they will not be allowed to sell light industry products without corresponding documents confirming their purchase. “If we want to live in a civilized state, we have to adapt to these conditions. It is not good when traders are selling undocumented goods. Therefore, sooner or later we will introduce these requirements. Do not wait for 1 January, start doing it right now,” Aleksandr Lukashenko said.

The President invited market vendors to cooperate in the effort to form the product choice of wholesale depots.

“We have verified that the present wholesale depots have nothing to offer. Market vendors say that the depots have no merchandise but Belarus-made and even then the merchandise is antiquated and expensive. The depots might have offered the full product range available from the Cherkizovsky market,” said the head of state. At the same time he stressed that merchandise must have proper papers.

The President instructed the Trade Ministry and the Prime Minister himself to create the wholesale depots that will feature products made by foreign manufacturers, too. Head of the Belarus President Administration Alexander Kosinets will be in charge of overseeing the effort. “They have to be created. We don’t want market vendors to say that they cannot buy their merchandise anywhere but Russia. And truly there is no other seller. I have asked you to create wholesale Belarusian marketplaces similar to [Moscow’s] Cherkizovsky,” said the head of state.

“Get down to it. We will help finance it initially. We will offer some loans for the purchase of the first batch of goods for sale,” noted Aleksandr Lukashenko. “Deal with the issue humanely.”

Aleksandr Lukashenko encouraged self-employed businessmen to join efforts to set up SMEs on transparent terms. The head of state emphasized that the Development Bank, the World Bank are ready to provide assistance.

“There is one prospect. If you want to be businessmen, shift to the normal style of work,” the head of state stressed. He guaranteed that businessmen will get support and protection in the Customs Union.