Legal acts governing fiscal decentralisation

The main legal acts governing fiscal decentralisation are the Budget Code of the Republic of Belarus and the Constitution of the Republic of Belarus.
Qualifying fiscal decentralisation
Local government revenues derive from own revenues, assigned revenues and the state budget. In 2014 the breakdown was as follows: under own revenues, non-tax revenues made up 9.6% and local taxes around 1%; assigned revenues amounted to income tax and profit tax of 47.2%, property taxes of 9.6% and commodity taxes of 28.5%; and inter-budgetary transfers made up 37.3%. In 2012 the share of local government revenue as a percentage of GDP was 17.5%. More recent data is unavailable. However, in the preceding period it is evident that local government revenues as a share of GDP have remained largely stable. The composition of local government expenditures does not exactly reflect the range of competences. While the main part of the expenditures on health, education, housing and community amenities falls on local bodies, policy is determined at the national level.

Fiscal equalisation mechanism

As a unitary state, fiscal equalisation mechanisms per se do not exist. However, inter-budgetary transfers (subsidies from central budget to local budgets) do exist aimed at the equalisation and balancing of local budget revenues and are based on the number of residents of a territory. The amount of transfers for each local budget is calculated based on the difference between expected revenues and expenditures at the local level. Expected revenues are based on the taxation and economic capacities of a territory, expenditures are based on the standard of budget sufficiency (the per capita threshold). The budget sufficiency per capita takes into account the difference in the cost of goods and services provided by the government as well as the ecological, economic and social conditions of a territory. This per capita threshold (budget sufficiency) is defined for specific government expenditures for each oblast and Minsk city.

Deficit, debt at the sub-national level and borrowing capacity

The 2008 Budget Code lays out local government borrowing capabilities and there have been no significant innovations since that time. Under article 65 of the Budget Code, local governments are able to access internal debt markets. Local governments do not need to obtain permission from the national government to access the debt market. However, local government debt limits have to be approved by the Ministry of Finance (Budget Code, Article 65). As of 2012 gross local government debt stood at 8.31% of local government revenue. From 2005 to 2010 local government debt rose relative to local government revenues. However in both 2011 and 2012 debt levels started to decrease. In recent years there was a local government budget surplus.