Entrepreneurs waiting for tax cuts

The entrepreneurs, who re-registered as private unitary enterprises, maintain they have to spend most of their profit to pay additional taxes. The European Radio for Belarus explores how the current and former sole entrepreneurs do business these days.

It has been two months that the European Radio for Belarus is monitoring the business of Syarhey who re-registered as a private unitary enterprise, selling household appliances. Happily, Syarhey’s initial concerns that he would get in the red would not come true. However, he complains that it makes little sense, because the profit is very small.

“I am a little bit in the black, but you don’t feel like working for this money”.

With the sale proceeds remaining at the same level, taxes have grown by almost 50 percent.

“Previously, I used to pay $2000 in taxes. Today, I pay $4000. I get this extra $2000 from the same profit as before. I remain with just peanuts…”

Entrepreneur Nina sells sweets and cookies at a market place. Now she has a status of the private unitary enterprise. Nina describes her profit as miserable.

“Whatever we make, we will have to give away… We have just a small profit… One can’t make much here”, she says.

Just like Syarhey, Nina complains of higher taxes, while the proceeds remain at the same level.

“We were small-size, and we have remained small-size. How can we become a large enterprise? You think that if we have changed the name to the private unitary enterprise, people start rushing to us? In reality, we spend almost all our profit on taxes”.

Out of Br 4 million of proceeds, she pays Br 800,000 in taxes. This is Br 600,000 more than when she had a status of a sole entrepreneur.

Nina: “Giving away Br 800,000 out of Br 4 million is too much. Taxes should be reduced”.

Syarhey also agrees that taxes must be lowered.

“So far, I will work this way… I heard that the union of entrepreneurs came up with a proposal to reduce taxes down to 7 percent. We will see how the government will react to this”.

“We have filed this proposal. A working group at the government is studying this document. The first reaction of specialists is positive”, says Aliaksandr Kalinin, the acting chairman of the Belarusian Union of Entrepreneurs told the European Radio for Belarus. The only question is how fast this issue will be resolved.

Meanwhile, private unitary enterprises are waiting for taxes to be cut, sole entrepreneurs continue to work in their old status and have no regrets. Entrepreneur Katsyaryna Chyzhyk refused to re-register as a private unitary enterprise. She says she runs a family business. Katsyaryna together with her sisters sells bed-sheets.

“There are difficulties, but I don’t regret. I sleep quietly… I don’t have to think whether I have processed the papers right”.

A total of 3946 entrepreneurs in Minsk re-registered as private unitary enterprises, Minsk City Hall told the European Radio for Belarus. Over the first three months of 2008, 2909 new sole entrepreneurs were registered, making a total of 69,519 in Minsk.

We will continue to follow the operation of businessmen who re-registered as private unitary enterprises.