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October 23 – October 29, 2023
Belarus-Russia relations

Improving Infrastructure and Tax Cooperation in Belarus

The situation got worse
Improving Infrastructure and Tax Cooperation in Belarus
Council of Ministers of the Union State. Photo: government.ru

Minsk is determined to overcome the challenges posed by Western sanctions and is quite optimistic about achieving this goal next year. They’ve put forward specific logistics solutions, and Belarus and Russia are collaboratively establishing a new supranational tax authority.

Aliaksandr Lukašenka recently met with the foreign ministers of Russia and Hungary, who came to Minsk for an international conference on Eurasian security. Their discussions covered various topics, including Western sanctions, geopolitics, the situation in Ukraine, and bilateral relations between the nations.

During these meetings, Lukašenka mostly made routine statements. He emphasized that despite external pressures, plans for the Union State are progressing, and trade between Belarus and Russia is on the rise. He also assured his counterparts that “we have largely overcome the sanctions” and anticipates any remaining issues to be resolved in the coming year.

The problems mainly revolve around logistics and finances. Russia recently granted additional permits to Belarusian road carriers for transporting goods to and from third countries, responding to the growth in trade volumes and restrictions from Kazakhstan. Given the shifting trade routes, Belarus is actively working on improving its transport infrastructure, with a particular focus on constructing a new highway to St. Petersburg.

Expanding the export of Belarusian goods faces challenges related to the limited capacity of the railway system serving northwestern Russian ports. Minsk has proposed two solutions for addressing this issue. The first involves creating a second railway line spanning several hundred kilometers, while the second entails restoring travel routes. Dzmitry Krutoy, the Ambassador of Belarus to the Russian Federation, emphasizes that the primary concern is securing financing for these infrastructure improvements in Russia.

Belarus and Russia are both committed to advancing their integration efforts, particularly in the realm of tax regulation. The Secretary of State of the Union State, Dmitry Mezentsev, has noted that both parties are on the verge of formalizing the establishment of the supranational tax authority. This new structure will primarily focus on improving tax legislation in both countries. Mezentsev argues that their shared approaches across various sectors and industries, as well as their readiness to issue documents within the next month outlining the operation of the new supranational tax authority, have raised concerns among their adversaries.

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Once a week, in coordination with a group of prominent Belarusian analysts, we provide analytical commentaries on the most topical and relevant issues, including the behind-the-scenes processes occurring in Belarus. These commentaries are available in Belarusian, Russian, and English.
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