Lukashenko threatened Moscow with a loss of “only ally” in the Western direction

Lukashenko threatened Moscow with a loss of “only ally” in the Western direction

Moscow. January 10. INTERFAX.RU — the President of Belarus Alexander Lukashenko said that Russia may lose “only ally” in the Western direction due to the lack of agreement on compensation over the tax maneuver in the oil sector.

“Do not assume that this (the lack of compensation from Moscow for the tax maneuver — if) disaster. If you elect the leadership of the Russian way of movement and the loss of the only ally in the Western direction, it is their choice. We’re going to get them can not” — said Lukashenko at the meeting with the government on Thursday in Minsk.

He again urged the government “not to exaggerate the problems associated with losses of the Belarusian budget due to the tax maneuver in Russia.”

Lukashenka stressed that “we must look for other reliable sources that compensate for these negative aspects”.

“But I want to warn you about those decisions, as shifting these problems on the shoulders of our people, Belarusians, do not even think. People should not feel any additional burden,” he said.

According to him, “earn an additional $400 million for Belarus, no problem.” “Purchasing power parity, as now assumed, the GDP of Belarus — under $80 billion What is the problem here? There is no such” — says Lukashenko.

That means the tax maneuver in the Russian Federation to Belarus

In early November, Minsk and Moscow entered into an active phase of negotiations on a compensation mechanism to the Belarusian side shortfall in budget revenues due to the beginning of the implementation in Russia of the so-called tax maneuver in the oil sector. The mechanism provides for the phased reduction of export duties on oil and oil products. Tax maneuver would increase the cost of oil to Belarus and reduced export duties on oil products, which are currently the main source of the budget surplus and directed to repay external debt. According to the Belarusian Finance Ministry, losses of the budget from the implementation of the tax maneuver in Russia in 2019 will be approximately $300 million, based on the price for oil at $70 per barrel.

According to the concern “Belneftekhim”, while maintaining the world price of oil, the implementation in Russia of the tax maneuver would lead to an annual rise in oil prices for Belarus by more than $20 per ton.

This radically will reduce the profitability of refining in Belarus. In addition, in the single customs space with Russia, Belarus will also have to abolish export duties on oil and oil products.

The difficulties of the negotiations

The Minister of Finance of the Russian Federation Anton Siluanov on 14 December told reporters that Russia did not give Belarus any promises for the payment of compensation for changes in tax legislation in Russia. “We believe these changes, including the tax maneuver in the oil industry, an internal affair of the Russian Federation”, — he said. Later, he also noted that the compensation to the Belarusian side for the tax maneuver, in fact, would represent a subsidy from the Russian budget.