Belarusian public budget for 2006 has been passed in a usual, uneventful way, without any open debate of lobby groups, without listening to business people and without taking into account a more acute competition between taxation and administration authorities. The government again pretends that it will cut taxes and simply its tax administration. Private businesses and state companies again have to accept the task of carrying the biggest weight of fiscal burden.
The entire budget accumulation and tax collection process is going to follow an old track in 2006. Most taxpayers again find themselves hostages to the finance ministry's old approaches.
At the same time, the government is obviously in fever to stimulate demand, mostly by making administrative raises in wages and salaries and giving more loans to companies. A leap-like increase in the average pay in Belarus against the background of slower GDP growth and complicated financial situation of companies, especially small and medium ones, can hardly be a good sign. According to government projections, the average pay has to grow by additional $42 in 2006. This ambition can hardly be fulfilled, unless the country opens doors to foreign investors and gets down to consistent de-bureaucratization of its economy.
One should not expect easier tax burden this year. The Belarusian tax system retains 13 national tax and duties, 10 regional taxes and 13 local taxes and duties. The share of VAT in the country's consolidated budget revenues is to grow to 26 percent. Individual and corporate income taxes will account for 12.5 percent of all revenues, from 11.1 percent in 2005. The share of excise taxes will jump from 5.7 percent in 2005 to 8.9 percent in 2006. Proceeds from foreign trade are expected to remain at the same level. Non-tax payments, both in relation to GDP and as a part of consolidated budget revenues, are projected to rise.
Thus, the year of 2006 will not see lower taxes, simpler tax administration or more liberal accounting policies. The government will continue its policy of tight standards for all production costs, because otherwise it would not plan such a serious increase in revenues from individual and corporate income taxes.
Slightly more than $3 billion was spent in 2005 to pay off pension allowances. The respective figure is expected to rise to $3.7 billion in 2006. The share of this spending item is always growing in public budget expenditures. It will account for 23.3 percent this year.
General national spending, defense and law enforcement will take up another 19.3 percent of consolidated budget expenditures. Nearly the same amount is envisaged under the "National Economy" spending item. As many as $3 billion for supporting its priorities is very good for these priorities, but one should keep in mind that the money is taken from average taxpayers and more profitable companies.
This year will see a 21-percent increase in spending on general government agencies, to 487.9 billion rubels. This includes 21.6 billion rubels for agencies under the president. If re-calculated in dollars, this means that presidential agencies cost the country about $825,000 per month. However, this amount does not include costs for the president's security service, which takes additional 21.96 billion rubels, or about $839 per month.
For comparison, the National Assembly's budget is 19 billion rubels, or $726,000 per month. The president's Reserve Fund is expanded to 265.5 billion, which means that taxpayers have to put as many as $10.1 million per month into it. The interior ministry will get 559.4 billion rubels from public budget in 2006. This means it spends $21.4 million per month to take of the safety of the country's citizens. The authorities do not forget about young people, especially those in pro-presidential organizations, such as the Belarusian National Youth Union. This union will get 7.74 billion rubels. Why taxpayers have to contribute almost $300,000 per month to this organization is not exactly clear, as small towns experience acute unemployment problems.
Still, logic certainly exists in how public budget for this year is built. It favors law enforcement agencies, government bureaucrats, state enterprises and private companies that provide for rural areas and supply components to large enterprises. Ideological and state audit organizations are also going to be rather well-off in 2006.
Private business seems to be the only outsider. It can hardly flourish with such budgetary approaches in place. But the country's further development, and also effective tax proceeds, can hardly be possible without business development.

Table 1. Expenditures of Belarus' consolidated budget in 2005 - 2006

Source: Ministry of Finance, 2005

Table 2. Revenues of Belarus' consolidated budget in 2005 - 2006

Source: Ministry of Finance, 2005