COVID-19: Business Support in Belarus

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published on 25 March 2020 | reading time approx. 2 minutes

 

 

Overview

Belarus remains the only country in the region, which keeps its borders open. This applies not only to private travelers, but to the cargo freight traffic as well. The government urges to stay calm and clearly shows, that no reasons to fear exist so far. All the state authorities and public institutions maintain their ongoing operation in an ordinary course. As of March 20 Belarus has not enforced a quarantine or declared the emergency. Thus, the state authorities consider the borders closure as a completely baseless measure so far, which only impedes safe way back home for many people.
 
Even though the Government tends to disregard the overall concerns, there is no denying that the Covid-19 has already affected Belarusian economy and business activity. All the neighboring states have already resolved upon border closure at least for passenger traffic, including the Russian Federation, being the primary trade partner. Despite the Government remains completely confident, private businesses in several sectors repeatedly report on losses due to recession in several sectors of economy. In this respect the European Bank for Reconstruction and Development (EBRD) is planning to step up its clients in Belarus in connection with the deepening impact of coronavirus.
 
In the meantime, as of now Belarusian authorities do not consider the ongoing status as crucial and thus no measures of business support have been implemented or announced in connection with the Covid-19 case.
 

Key sectors affected

Travel business

Needless to say, that travel companies worldwide suffer enormous losses due to global travel restrictions and the overall tend to minimize whatever trips. The mass media report on all-round cancellation of tours booked for the ongoing year.
 
In this respect, the Republic union of travel companies in Belarus (the “Union”) drafted and submitted the enquiry to several state authorities seeking for business protection at different levels. The key statements envisaged in the enquiry were as follows:

  • To cease fulfillment of ongoing contractual obligations with the customers up to the end of 2020;
  • To implement tax holidays under the primary taxes (in particular, with respect to CIT, VAT, land tax);
  • To cease payment of mandatory social security contributions;
  • To implement standstill on interests amounts, defer payment of principal amounts under extended
    loans;
  • To reschedule payment of indebtedness under extended loans.


In addition, the Union enquired to develop and implement a state support program for tourism
businesses, seeking for provision of state subsidies and cheap loans.
 

Retail business

According to public sources, due to the recent events the sales of comfort goods dropped significantly on a consumer market, which especially hit small and medium retail businesses. Due to decline in consumption, retailers suffer significant losses, especially when it comes to resale of imported goods. Some of entrepreneurs were forced to reduce or cease their activities at all. In this regard, the representatives of businesses published another petition for public discussion and further submission to the Ministry of Finance and the Ministry on taxes and duties of the Republic of Belarus.
 
The key statements of the new petition mainly reiterate the provisions of the inquiry submitted by the Union. In addition, another important point to be included provides for a grace period of 3-6 months, in which no penalties shall be charged in connection with non-payment or delayed payment of taxes.
 

Further perspectives

The state authorities show no feedback connected with existing enquiries of businesses. According to the recent address of the President the “ongoing status with the Covid-19 does not require drastic measures”. In the meantime, the today’s state-of-affairs is evolving rapidly. As of 20 March 2020 according to public sources the number of people affected by Covid-19 in Belarus hits 69, while the cross-border trade is becoming more impeded day-to-day.
 
In this regard, the ongoing attitude of authorities may overhaul any day. Even now the authorities are constantly enquired not only about legal or fiscal measures for business support, but also for creation of a special task group for support of businesses affected by corona-case.
 
We believe, that in case of eventual enforcement of a quarantine, the measures for business support will follow shortly. Most likely, that in this event at least some of the aforesaid proposals received from businesses so far will be considered and implemented by the state authorities.

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