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1. 30 Years of Economic Transformation in CEE: Key Five Lessons For Belarus

Author:
Aleś Alachnovič, Andrzej Raczko, Izabela Styczynska, Jarosław Neneman, Kateryna Karunska, Krzysztof Głowacki, Pawel Swianiewicz, and Sierž Naŭrodski
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Center for Social and Economic Research - CASE
Abstract:
Belarusian economy has been stagnating in 2011-2015 after 15 years of a high annual average growth rate. In 2015, after four years of stagnation, the Belarusian economy slid into a recession, its first since 1996, and experienced both cyclical and structural recessions. Since 2015, the Belarusian government and the National Bank of Belarus have been giving economic reforms a good chance thanks to gradual but consistent actions aimed at maintaining macroeconomic stability and economic liberalization. It seems that the economic authorities have sustained more transformation efforts during 2015-2018 than in the previous 24 years since 1991. As the relative welfare level in Belarus is currently 64% compared to the Central and Eastern Europe (CEE) countries average, Belarus needs to build stronger fundaments of sustainable growth by continuing and accelerating the implementation of institutional transformation, primarily by fostering elimination of existing administrative mechanisms of inefficient resource allocation. Based on the experience of the CEE countries’ economic transformation, we highlight five lessons for the purpose of the economic reforms that Belarus still faces today: keeping macroeconomic stability, restructuring and improving the governance of state-owned enterprises, developing the financial market, increasing taxation efficiency, and deepening fiscal decentralization.
Topic:
Economics, Governance, Economic Growth, and Trade
Political Geography:
Eurasia and Belarus

2. Estonian corporate tax: Lessons for Poland

Author:
Aleksandr Łożykowski, Anna Leszczyłowska, and Dmitri Jegorov
Publication Date:
04-2020
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
Estonia has Europe’s most transparent tax system (while Poland is second-to-last, in 35th place), and is also known for its pioneering approach to taxation of legal persons’ income. Since 2000, payers of Estonian corporate tax don’t pay tax on their profits as long as they don’t realize them. In principle, this approach should make access to capital easier, spark investment by companies and contribute to faster economic growth. Are these and other positive effects really noticeable in Estonia? Have other countries followed in this country’s footsteps? Would deferment of income tax be possible and beneficial for Poland? How would this affect revenue from tax on corporate profits? Would investors come to see Poland as a tax haven? Does the Estonian system limit tax avoidance and evasion, or actually the opposite? Is such a system fair? Are intermediate solutions possible, which would combine the strengths or limit the weaknesses of the classical and Estonian models of profit tax? These questions are discussed in the mBank-CASE seminar Proceeding no. 163, written by Dmitri Jegorov, deputy general secretary of the Estonian Finance Ministry, who directs the country’s tax and customs policy, Dr. Anna Leszczyłowska of the Poznań University of Economics and Business and Aleksander Łożykowski of the Warsaw School of Economics.
Topic:
Governance, Tax Systems, Investment, Fiscal Policy, and Corporate Tax
Political Geography:
Eurasia, Poland, and Estonia