Belarus Introduces 30% Tax on Bank Card Transactions Buying Foreign Currency

All clients from Belarus will have to pay a transaction cost of 30% if they are transferring funds from a

100000-rubles-Belarus-2000-bAccording to an announcement on the website of the central bank of Belarus, every resident who pays for goods or services located abroad through his local VISA or MasterCard denominated in Belarusian ruble will be taxed 30%.

For brokers accepting customers from Belarus and their clients, this means that every incoming transaction though their debit or credit card denominated in the local Belarusian ruble, will have to be charged 30% on top of existing transaction costs for the sum to be credited to the client’s trading account.

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Clients who deposit funds from their existing foreign currency accounts will not have to pay any additional levies. From a conversation with the Belarus Central Bank’s spokesperson, Forex Magnates’ reporters learned that the banning of OTC forex transactions in the country has not been under consideration.

Late last week, dealing on the over-the-counter (OTC) foreign exchange market in Belarus was banned until the 1st of January, 2017, with the exception of deals involving the National Bank of Belarus (the Belarus central bank).

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The additional levy on purchasing foreign currency was active from the 20th of December,  including purchases of foreign currency at banks, foreign exchange bureaus, through card transactions, card payments abroad and any internet purchases.

The move was triggered by the spread of the Russian ruble collapse to the closely interlinked Belarusian economy. The result is loss of credibility in the local currency which hasn’t been liquidated with the introduction of the 30% levy.

Quite the opposite – panicking Belarusians went on a buying spree, buying out foreign made goods from local stores after Friday’s announcement and before the introduction of the 30% levy.

Some weren’t deterred by the huge penalty on the transaction and went to the foreign exchange desks anyway. The efforts made by the central bank might have actually contributed to an exacerbated panic.

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