Why Belarusians Prefer to Shop in Poland and Lithuania?

A billboard in Belarusian in Lithuania inviting for tax free shopping. Source: Aleś Zarembiuk

In July the Ministry of Trade announced a plan to levy a tax on online purchases in foreign shops​. Since then the state agencies have been elaborating the methods that will be used for tax collection. It could become another tool to prevent Belarusian customers from buying abroad, both online and in the flesh.

Earning almost three times less than Poles and Lithuanians, Belarusians often prefer to buy food, clothing, household appliances and many other goods in neighbouring EU countries rather than at home. The reason is simple: foreign shops have a wider variety of goods, which are on average cheaper and of better quality then in Belarus.

Unattractive Belarusian Goods

Lukashenka stated in September 2013 that Belarusians spend approximately $3 billion annually on shopping in EU countries (over 4% of GDP). This is quite a significant number when compared with the fact that each year the authorities struggle to find the necessary resources for the paying back of between $3-4 billion of foreign public debt.

Surprisingly, “richer” Poles are not interested in shopping in Belarus, while “poorer” Belarusians often buy in Poland. In the last five years spending of Belarusians in Poland has more than doubled, reaching just under $1 billion. At the same time, Poles spend around $25 million annually in Belarus. They mainly buy alcohol, cigarettes, and petrol. Although this number does not include the contraband that Belarusian smugglers take illegally to Poland.

Various consumer goods in Poland and Lithuania cost less than in Belarus while their quality is better and the range is wider. This applies to wide variety of goods, for instance, cheese and meat, washing powder and shampoo, jeans and trainers, IKEA furniture and a new iPhone. In addition, in Poland and Lithuania, Belarusians can find the latest products and products with significant discounts. This is something rather rare in Belarus, especially in state-owned shops.

Yet, 25 years ago there was hardly any difference between Poland and Belarus in living costs. Belarusians could go to Poland to buy or sell one type of groceries, e.g. eggs, while Poles could go to Belarus to buy or sell other types of groceries, such as meat. Today Belarus has hardly any good offers to tempt Polish customers. Even worse, it gets harder and harder to interest its own customers.

Shopping In Poland Becomes the “New Normality” For Belarusians

Belarus occupies the first place in the world on the number of Schengen visas per capita. According to the European Commission, in 2014 Belarusians received 880,000 visas, which is 108 thousand more than a year before. These figures do not include holders of the Pole's Card which allows people who claim to have Polish roots the opportunity to visit Poland without a visa.

Four out of five Belarusians declare shopping as the main purpose for visiting Poland, according to the Central Statistical Office of Poland. Moreover, each time Belarusians visit Poland or Lithuania as tourists, on business or to participate in various events, they always visit local shopping malls. Whether they go to Vilnius for a rock concert or to Warsaw airport, they will bring back goods bought in Poland or Lithuania.

The Polish government established a special type of Schengen visa for Belarusians that provides “for shopping”. Malls close to the border can issue invitations for potential customers. The first invitation for a short term visa can be for free with the obligation to spend $70-100 on goods. The next time, VAT invoices which confirm the previous shopping escapade should be sufficient for receiving another visa, which is usually a long term multi-entry visa.

Many Polish and Lithuanian shopping centres close to the Belarusian border organise special offers for Belarusians, like the annual Marathon of the Belarusian Week of Shopping and Recreation in Białystok, the capital of Podlaskie voivodship in Poland. During such weeks, shops and hotels grant Belarusians various special offers and discounts. VAT tax recovery on purchases on the border creates additional incentives for Belarusians to shop abroad.

Białystok’s and Vilnius’ malls actively advertise also inside Belarus. Akropolis and Ozas in Vilnius, the mecca for Belarusian shoppers, hold major advertising campaigns in Belarusian cities.

In Podlaskie voivodship of Poland shopping malls such as Auchan, Ikea, and Leroy Merlin install billboards written in Belarusian language. The shops try to market themselves among the increasing number of Belarusian customers.

Belarusian Government Tries to Limit Shopping Abroad

Belarusians became so active in shopping abroad that Lukashenka presented in 2013 the idea of introducing a $100 fee for Belarusians crossing the border with the EU. As a result of foreign shopping foreign currency leaves the economy putting pressure on the Belarusian rouble. The $100 fee was supposed to limit the negative impact of shopping abroad. However, following a wave of criticism Lukashenka retracted this proposal.

the authorities actively look for ways to tax purchases made online in foreign shops

To encourage Belarusians to shop in their own country on 10 March 2015 the government introduced new restrictions on the import of goods by individuals for private purposes. Now, the new policy allows Belarusians to import various duty-free items such as microwaves, refrigerators, washing machines and computers but they have to prove that they are bought for personal use.

Furthermore, the authorities actively look for ways to tax purchases made online in foreign shops. In late June, the chairman of the upper chamber of Belarusian parliament, Michaił Miasnikovič, revealed a plan to introduce a tax on imported online purchases.

The economic crises makes Belarusians count their money more carefully. Shopping abroad, particularly in big cities near the border with Belarus, has already become a way to save money and to buy better quality goods for many Belarusians. More and more frequently lucky owners of a Schengen visa travel for shopping in Vilnius, Bialystok and Warsaw.

Belarusians will prefer to shop abroad as long as the Belarusian authorities sustain the old ineffective economic system which produces many uncompetitive and unwanted goods. The recent depreciation of the Belarusian rouble will temporarily make imported goods more expensive but the trend to shop abroad is irreversible.

Aleś Alachnovič is the Vice President at CASE Belarus and PhD candidate at the Warsaw School of Economics, an alumnus of the London School of Economics.​

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