Belarus: Significant amendments to tax laws

On 1 January 2010 the Special Part of the Tax Code of Belarus came into force. This new legal act establishes procedures for applying all State and local taxes, as well as special tax regimes.

The most significant tax amendments are the following:
– abolition of turnover tax (fee paid to the National Fund for Support of Agricultural Producers), tax on acquisition of motor vehicles, local taxes on retail sales and parking;
– VAT increases from 18% to 20%;
– corporate income tax applied to profits received in the form of dividends, as well as profits from sale of shares in the authorized capital of Belarusian companies, decreases from 24% to 12%;
– certain types of expenses (e.g. costs of advertising and marketing services) which were previously deducted for profit tax purposes only within established limits, are now fully deductible;
– taxpayers may choose the reporting period with regard to payment of corporate income tax (quarter or month); and
– personal income tax levied on dividends decreases from 15% to 12%.


Government approves 6 mEUR for Ämari air base

The Estonian government ruled on Thursday to allocate 96 million kroons (EUR 6.13 mln) in bridge financing for the upgrading of the Ämari Air Base which the state will get back when NATO co-funding comes in.
The alliance is to pay over its share of the financing by 10 July 2011 at the latest.
Defence Minister Jaak Aaviksoo said at the governmental news conference that the renovation of the Ämari Air Base will be completed at the end of this year or in the first quarter of 2011.
Plans are to make the base fully operational in 2011, and it should achieve full combat readiness in 2012.
The facility, located some 40 kilometers southwest of the capital Tallinn, is designed to receive transport planes and serve as a base for NATO fighters on Baltic airspace guarding duty. The alliance put up funds for the upgrading and construction of the traffic area, the maintenance area, and fuel storage facilities.
The largest and most extensive part of the project is the renovation of the traffic area. Upon its completion the air base will have a 2 750-meter runway, a new lighting system, ramps and taxiing lanes.
The upgrading of the air base, financed jointly by Estonia and NATO, is the alliance’s first large security investment in this country. The project will cost a total of 1.3 billion kroons, of which NATO is contributing 500 million kroons. Extensive construction works at Ämari began in 2008.

Source: Estonian Review

Consumer price index in December

According to Statistics Estonia, the consumer price index increased 0.1% in December 2009 compared to November and decreased 1.7% compared to December 2008.

Goods were 1.4% and services 2.4% cheaper compared to December 2008. Food products were 5.1% cheaper and manufactured goods were 2.0% more expensive.

Regulated prices of goods and services have risen by 3.8% and non-regulated prices fallen by 3.4% compared to December 2008.

Compared to December 2008, the consumer price index was mainly influenced by the 7.3% decrease in the prices of food, of which dairy products gave one third (the price decrease 13.6%) and the 15% cheaper vegetables and fruits gave another third. The index was more notably influenced also by the 18.3% more expensive motor fuel and by the 16.4% cheaper heat energy.

In December compared to November, the consumer price index was mainly influenced by higher prices of the end-of-year holiday tours, end of sales of food and increased prices of motor fuel. The prices of fresh vegetables increased the most (9.8%) and the prices of flour decreased the most (8%) compared to the previous month.

Change of the consumer price index by commodity groups, December 2009
Commodity group December 2008 –
December 2009, %
November 2009 –
December 2009, %
TOTAL -1.7 0.1
Food and non-alcoholic beverages -6.8 0.5
Alcoholic beverages and tobacco 0.2 -0.4
Clothing and footwear 0.8 -0.1
Housing -7.1 -0.3
Household goods 0.7 -0.5
Health 2.6 0.3
Transport 4.5 0.4
Communications 0.7 0.0
Recreation and culture -2.5 1.2
Education 1.8 0.0
Hotels, cafés and restaurants -3.4 -0.2
Miscellaneous goods and services 7.3 -0.2

Source: Statistics Estonia

Consumer price index decreased in 2009

According to Statistics Estonia, the consumer price index decreased by 0.1% in 2009 compared to the average of 2008.

For the first time in Estonia, the decrease in the consumer price index compared to the average of the last year was fixed.

In 2009 compared to the previous year goods were 1.8% cheaper and services 3.1% more expensive. Food products were 0.3% and manufactured goods were 3.0% cheaper.

The consumer price index was mainly influenced by the decrease in the prices of motor fuel and food as well as by the increase in the prices of tobacco products.

In 2009 compared to the average of the previous year, the prices of motor fuel decreased by 13.4%, the prices of dairy products by 12.8% and rents by 31.3%. The price increase of tobacco products by 24.7% was the aftereffect to the increase of excise duties in 2008 when cigarettes with new tax stamps arrived to the shops only in August–September 2008.

Change of the consumer price index by commodity groups, 2009
Commodity group 2008–2009, %
TOTAL -0.1
Food and non-alcoholic beverages -4.0
Alcoholic beverages and tobacco 10.7
Clothing and footwear 0.8
Housing 1.0
Household goods 2.5
Health 4.2
Transport -6.5
Communications -0.2
Recreation and culture -0.2
Education 4.7
Hotels, cafés and restaurants 0.5
Miscellaneous goods and services 7.6

Source: Statistics Estonia

MP suggests better relations with Eastern Partnership States

At the first meeting of the European Union foreign ministers with their Eastern Partnership colleagues, Foreign Minister Urmas Paet emphasised the importance of free trade agreements and visa facilitation.
At the meeting of the Eastern Partnership foreign ministers, the European Union foreign ministers and their colleagues from their partner countries Armenia, Azerbaijan, Georgia, Ukraine, Moldova, and Belarus discussed how to better implement the Eastern Partnership policy that began in May of this year. “Eastern Partnership must become a values-based policy that will provide effective aid to target countries in growing closer to the European Union and in developing democracy and building up the rule of law,” said Foreign Minister Paet. “Eastern Partnership must first and foremost offer our Eastern partners practical co-operation and the maximum possible support for implementing reforms, thereby creating a strong framework for this ambitious policy which includes the European Union’s support and resources, the concluding of association agreements and the goal of visa freedom, as well as economic integration amongst our partners,” Paet emphasised.
Foreign Minister Urmas Paet stressed the need for open markets and the unlawfulness of protectionist measures, calling upon the nations that had not yet joined the World Trade Organisation (WTO) to do so. “We must promote reciprocal economic and trade co-operation that would result in the possibility of concluding wide-ranging free trade agreements with those nations that are prepared for them,” Paet noted. “Alongside political reforms, our partners to the east require comprehensive economic reforms and better co-ordinated support and technical aid from the European Union,” Paet explained.
Foreign Minister Paet expressed satisfaction over the fact that the foreign ministers confirmed the priority activities of Eastern Partnership for the next few years and expressed hope that the swift execution of the Eastern Partnership seen thus far will continue during the Spanish European Union presidency.
Eastern Partnership is the continuation of a proposal made in 2008 to strengthen the Eastern dimension of the European Neighbourhood Policy, the European Commission’s report on strengthening the eastern partnership initiative published at the end of 2008, and the European Council conclusions from December 2008 and March 2009 on starting up the Eastern Partnership programme.

Source: Estonian Review