Belarusian Business Reform: Less Time with the Taxman

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Has the regulatory burden for Belarusian businesses decreased?  According to a new World Bank Country Note on Running a Business in Belarus, progress has indeed been made over time. For example, the number of visits or required meetings with tax officials has significantly decreased from 2005 to 2008: from 3.2 to just 1 visit per year. Also, the percentage of firms reporting incidence of bribes with these tax officials decreased as well.

Comparing the firm-level data obtained in Belarus to similar Enterprise Survey data in 28 other Eastern Europe and Central Asia (ECA) countries yields two interesting statistics as discussed in the Note:

  1. Belarusian firms have the highest proportion of government or state ownership in private firms, on average 10 percent.
  2. Belarus stands out in the region as having high percentages of female participation in both firm ownership (53%) and in the labor force

However, despite observed progress in the business environment over time, Belarus lags ECA countries in many investment climate indicators. Firms identify tax rates and compliance with government regulations as the biggest obstacles to their performance. Streamlining regulatory requirements could further diminish opportunities for bribe collection. Overcoming these constraints, along with increasing firms’ use and workforce knowledge of technology, are reforms that could reduce the gap between Belarus and its neighbors.

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Authors

Arvind Jain

Private Sector Development Specialist, World Bank

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