Protests by Belarusian entrepreneurs against the imposition of an 18% value-added tax (VAT) on all imports from Russia have continued for the past two weeks. The reaction of the Lukashenka government has been described aptly as a “stick and a carrot” policy: a combination of repressive acts interspersed with moderate public statements and recently the announcement of a government conference to debate the issues. While the government has never considered the notion of withdrawing the tax, it has at least offered to improve the working conditions of the vendors by demanding lower rents for stalls and dispensing with the need for them to produce documents verifying the payment of VAT.
The announced vendors’ strike began on March 1, despite official warnings that they would be deprived of their market sites if they went ahead with it (see EDM, February 15). In Minsk on that day, a group of businessmen decided to take their protests directly to the president’s official residence, but were thrown back by OMON troops outside the House of Officers (directly opposite the presidential building). At this time, the vendors vowed to refuse to pay any VAT until March 25 and to continue the strike.
In Hrodna, about 1,000 businessmen took part in a protest that lasted for three days, and there were actions of similar size in all the major towns of the country. On March 4, there were several arrests when some protesters tried to gather in the central square in Hrodna (Belorusskiy Rynok, March 4-13). As the protests continued, Lukashenka declared that there could be no avoiding payment of the VAT and that the authorities would apply “tough responsibility” (Lad, March 17).
From the beginning, several opposition leaders have participated in the protests, sometimes clad in orange scarves, replicating the protests in Ukraine late last year. Repressions against these individuals have been swift and harsh. For example, Marina Bahdanovich, a well-known activist of the United Civic Party, was arrested on March 1 and fined BR4.8 million. She maintains that such a sum is simply beyond her means as an unemployed single mother (Belorusskiy Rynok, March 4-13).
On March 2, the authorities sentenced Anatol Shumchenka, the chairman of the union Perspektiva, to 10 days of administrative arrest in a special prison in Minsk. When his term was about to expire, he reportedly disappeared. The press secretary of Perspektiva, Olha Krumina, stated that she and other colleagues had searched for him at home, at clinics, and at the residences of friends, before finally locating him in the pre-trial detention center of the Moskovskiy section of the Ministry of Internal Affairs, where he was allegedly being detained for “beating another prisoner.” In Krumina’s view, the detention was a provocation because it was unlikely that Shumchenka would commit such an act, especially at the moment of his release (Narodnaya Volya, March 15).
The president began to take a personal interest in the protests as the strike continued. On March 10, he visited the Maksimus market in the Malinovka region of Minsk and promised to resolve some of the problems faced by the businessmen as long as they agreed to pay the VAT on the goods delivered from Russia. The president acknowledged that although the vendors comprised only 60,000 people (the actual figure is reportedly 120,000), they all had families and deserved some consideration. According to the strikers, Lukashenka hinted that the tax would soon be reduced to 13% and eventually 5%.
However, he also warned them that they faced limited futures and would likely soon be forced out of business by supermarkets and larger structures. He also informed them that one of the most important trading locations, the market of the Dynamo Stadium, would soon be closed for repairs. In a similar vein, the Ministry for Taxation and Duties sent a letter to its tax inspection offices in which it recommended that sanctions should not be imposed on the strikers, and those who made mistakes while preparing documents for the payment of VAT should not be fined. However, the letter stressed that all businesses must pay the VAT (Belorusskiy Rynok, March 14-20).
The government has thus adopted a firm line with the strikers, singling out troublesome individuals for harsh treatment, while using a conciliatory tone with the mass of strikers and essentially allowing them to circumvent the immediate effects of the VAT by not demanding official documents of the transactions. The latter seems to be an implicit acceptance that the tax will not be paid in the short term, but the president maintains that all procedures must be in place by July 1. Lukashenka has also emphasized the important role to be played by local mayors and city administrations — a recognition of the potential transformation of the vendors’ protests into an anti-government movement supported by the opposition (http://president.gov.by).
Arguably Lukashenka’s claim that the vendors’ kiosks will soon become obsolete has some validity. But the ambiguous government response to date also illustrates that at present they still serve an essential function of supplying scarce goods to a population that might otherwise be starved of consumer products. Further, the very public manifestation of anti-government sentiment has clearly alarmed the Lukashenka administration.