Frequent changes in the array of taxes on profits, property, land, fuel, natural resources, income, Chernobyl consequences, employment, social security and more pose problems for business people. Fines are often severe and the tax authorities are entitled to keep a portion of them, providing incentive to find irregularities. A clause in the Foreign Investment Act which entitles foreigners to a five year exemption from new tax laws that are less favorable than those in place at the time of a firm's registration is often disregarded by Belarusian authorities. Only utilities, public transportation, bread and a few other food staples retain government price controls. The act of registering with the local authorities is often a significant obstacle for foreign and domestic businesses alike.
Applications can languish unattended or be arbitrarily denied.
Banking regulations authorize each legal entity only one ruble account and one hard currency account. The September stand-by loan went forward because of Belarus' impressive macroeconomic stabilization record for1995 and because of a tightly written agreement requiring Belarus to hit specific reform benchmarks before each tranche of the loan can be released. The EBRD is, however, financing several major commercial and infrastructure improvement projects. The World Bank is also active in Belarus, financing telecommunications, construction and other projects. OPIC has begun to finance a few Belarusian joint venture projects and provide political risk insurance.