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Banks may be required to disclose information about their clients to tax authorities

 

The tax ministry has drawn up a bill that would require banks to notify tax authorities about loans issued to individuals and interest rates on deposits.

According to the ministry’s report explaining the need for the disclosure of bank information, the Tax Code’s Article 121 currently does not allow tax offices to obtain necessary information about the clients of commercial banks.

While investigating whether individuals declare their income in full, tax authorities are unable to verify income data if bank loans or interest payments on bank deposits are reported as the sources of income that went toward the purchase of expensive property, the report says.

Individuals apply for bank loans for such purposes to legalize concealed income, the ministry says, noting that some loans are repaid very quickly, sometimes within a week.

Over the recent month, the government has repeatedly declared its intention to tackle the “shadow economy.”

Prime Minister Mikhail Myasnikovich warned in July that a tax might be imposed on unemployed working-age individuals. There are about 445,000 such people in Belarus, who in no way contribute to the development of the Belarusian economy but still receive social benefits, he said.

According to the government, many people do not apply for unemployed status because they hold unofficial jobs and are unwilling to pay taxes.

Tax Minister Uladzimir Paluyan said on August 1 that Belarus' shadow economy accounted for an estimated eight to 10 percent of the country's Gross Domestic Product.

"We should take away the share that is to be contributed to the budget from this percentage, so that the money works for the benefit of entire society," Mr. Paluyan said. //BelaPAN