MINSK, 24 July (BelTA) – The Tax Free system will need some time in Belarus to catch on, Belarusian Trade Minister Valentin Chekanov told media on 24 July, BelTA has learned.
“I think the fitting process will take till the end of the year. But Beltamozhservis has a serious attitude towards this business,” noted the Trade Minister.
Valentin Chekanov reminded that Beltamozhservis had been chosen to operate the Tax Free system in Belarus. The project will also involve the national postal service company Belpochta, the country’s largest bank Belarusbank, major shops and other interested corporations.
Major shops are expected to sign the relevant contracts with the Tax Free operator within 30 days. The Trade Ministry in association with oblast trade offices is encouraging the signing of these contracts. The software to connect all the parties involved in the process — banks, post offices, shops, the customs service, and the Tax Free operator — is expected to have all the quirks ironed out within 30-40 days.
The Belarusian Trade Minister pointed out that such information products are not available in every country, therefore it will be necessary to write down a large part of the information manually into receipts. Thus, the Tax Free system can work without special software. “However, software-based approach will allow minimizing the influence of the human factor, will accelerate processing, and will allow verifying these documents. There is a lot of work, new work for us, but we will manage it,” noted the Minister.
He also believes that initially it is necessary to pick at least 5-10 shops in every oblast to introduce the Tax Free system.
Belarus introduced the Tax Free system on 1 January 2013 as a way to return the VAT that foreign nationals pay while purchasing merchandise in Belarus. The minimal purchase has to be Br800,000 to become eligible for the tax refund. The purchase has to be made in the same store on the same day. The VAT will not be reimbursed if the product is exempt from VAT in Belarus or is subject to reduced VAT (for instance, food). Excisable duties are not subject to VAT refund either.
The VAT return scheme works like this: a foreign national produces a receipt at a border checkpoint while leaving the country. The VAT will be returned as cash if there is a bank office at the border checkpoint. If there is none, the money will be returned as a bank transfer.
The Tax Free system is widely used all over the world to support retail, bolster trade figures, and encourage small businesses that cater to foreign tourists. The Tax Free system in Belarus will contribute to better perception of the country, particularly during international cultural, sport, and other events. It will increase the appeal of Belarusian retail for foreign buyers.