Tax rate change prompts Soros to freeze aid

July 28, 1995

The Soros Foundation has suspended aid programmes for education, scientific and medical research and cultural activities in Belarus.

The decision is a reaction to changes in the tax laws which make the recipients of Soros money liable to pay up to 40 per cent tax.

Under the new laws, only charitable funding through government ministries or government-sponsored charities can claim tax exemption. The foundation in Belarus tried to appeal against the loss of tax-free status, arguing that it was supporting precisely the same areas as the official charities. Many young scientists, researchers, students and writers look on Soros as their best hope for support.

The justification given by the authorities is that some private charities were failing to carry out their stated aims. For the most part, the lapses seem to have been due to inexperience rather than deliberate attempts: some Chernobyl- related charities, for example, overspent on entertaining foreign experts or sending representatives to international conferences.

But the Soros Foundation, which has so far spent more than $5 million in Belarus, is unlikely to have committed such errors.

However the former hard-line Communists who still hold power in Belarus have little sympathy for the foundation. When George Soros himself visited Minsk last year, Vyacheslav Kebich, the then prime minister, pointedly refused to meet him and announced that if he won the forthcoming presidential election he would curtail the foundation's freedom of action and require it to ask for permission for each project it wanted to fund.

The successful contender for the presidency, Alaksander Lukash-enka, who maintains a strict control over the official media, has little sympathy with the foundation's support for press freedom.

Whether Soros will quit Belarus is so far unclear. According to Carlos Sherman, vice president of the Belarus PEN centre, a major recipient of Soros funding, the freeze is a temporary measure while Soros officials press for tax-free status.

But for higher education and research in the country the threat of withdrawal is alarming.

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