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products to mineral extraction tax (MET) on oil production. It envisages a gradual reduction in the rate of export duty on oil and petroleum products from 30% to zero in the period from 2019 to 2024 and a proportionate increase in MET.
2.0 Politics
2.1 Russia refuses to compensate Minsk for oil duty cut
Russia has refused to discuss with a high-level delegation from Minsk possible ways of compensating Belarus for its multi-billion losses from the so-called 'tax manoeuvre' in the Russian oil sector that will effectively cut energy subsidies to Belarus.
Russian Deputy PM Dmitry Kozak told journalists on December 13 that he did not consider it right to discuss this issue and the gas price issue "before fundamental decisions are made on progress towards further integration between Russia and Belarus".
The end of the oil subsidies could derail the nascent Belarusian recovery and will cost Minsk billions of dollars in lost income. Belarus president Alexander Lukashenko caught the headlines over the weekend by claiming Russia was attempting to annex Belarus by using energy as a tool.
The Belarusian leader believes that under the pretext of "deep integration" Moscow wants to include his country in Russia. He stressed that he clearly understands all the hints, but believes that sovereignty for Belarus is “sacred.” “If they want us, as [Russian nationalist and LDPR leader Vladimir] Zhirinovsky proposed, to be made a regions and shoved into Russia, this will never happen. And if the leadership of Russia is thinking in these terms, this is to the detriment of Russia itself... For us, remember, sovereignty is holy, ” the Belarusian leader said.
These statements appeared against a background of a meeting between Russian Prime Minister Dmitry Medvedev with his Belarusian counterpart Sergei Rumas in Brest the same day, who were discussing progress in creating a common market under the auspices of the Eurasia Economic Union (EEU).
"Russia is willing to move further in the development of the Union State [between Belarus and Russia], which would include the establishment of a common issue centre, a common customs agency, a common court and a common accounts chamber in the sequence specified in the [...] 1999 treaty on the formation of the Union State," Medvedev said. "In this respect, it is necessary to implement common tax and pricing policies in the areas that are beyond the competence of the Eurasian Commission."
The statement has immediately triggered worries in Minsk over possible Moscow's attempts to launch a new economic, trade and military aggression in the region against its post-Soviet neighbour, which could follow the Kremlin's annexation of Ukraine's Crimea in 2014 and fuelling of the Donbas military uprising.
6 BELARUS Country Report February 2019 www.intellinews.com