November 23, 2017 / 12:04 PM / a year ago

Belarus passes draft law to cut red tape for businesses

KIEV, Nov 23 (Reuters) - Belarus’s parliament passed a draft law on Thursday cutting red tape for businesses by reducing the number of fines that can be imposed on firms for violations and removing most grounds for property confiscation.

As financial aid from Soviet-era overlord Russia declines and after protests over unemployment and low living standards, President Alexander Lukashenko is rolling out a series of business-friendly measures to foster private sector growth.

The draft law proposes that businesses who fall foul of regulations be warned rather than fined in the first instance, and also virtually eliminate the state’s ability to confiscate companies’ property.

At present, companies complain that their goods shipments can be seized for trivial reasons such as small errors in paperwork.

“Practice shows that the penalties for a number of regulations are disproportionate,” said Vadim Ipatov, director of the National Centre for Legislation and the bill’s sponsor.

“These are the very regulations that raised most concerns for the business community.”

The law will enter into force after it is approved by the parliament at the second reading.

“Our business is very much waiting for this law. We need to pass it once and for all this year,” Speaker Vladimir Andreichenko said in parliament.

Street protests earlier this year against a “parasite tax” levied on the unemployed to compensate the state for lost taxes, were the biggest anti-government protests for years.

Lukashenko has increased support for private companies to help boost growth and potentially avert more unrest but has not reformed state firms that dominate the economy.

Wedged between Russia and the European Union, Belarus was long reliant on money from Moscow but that help has diminished as Russia faced its own economic problems.

The Belarussian economy was in recession in 2015 and 2016, pushing up unemployment and hurting earnings and fuelling public discontent with strongman Lukashenko.

One decree he signed makes it easier to start a small business such as a hair salon or a bakery. He has also tightened regulations for the inspection of companies and made it illegal to halt a company’s operations without a court order.

Decrees in the works will cut the number of licences firms need and put a moratorium on the introduction of any new taxes or increase of current taxes until 2020. (Editing by Matthias Williams and Catherine Evans)

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