Oleg Budza about wages “in envelope”: negatively affects national security

The National Trade Unions Confederation of Moldova (CNSM) supports the initiative of the State Tax Service (SFS) regarding the fight against wages “in envelope” and considers that this phenomenon not only damages the state and undermines the welfare of the people, but also negatively affects national security.

The CNSM organizes its own campaigns to combat illegal labour schemes, including the promotion of collective labour agreements.

Oleg Budza, president of CNSM, said in an interview for Noi.md that the presence of trade union organizations in enterprises has a positive influence in the fight with wages “in envelope”, as well as in the elaboration of collective agreements and good information of the employees.

“The individual labour contract is concluded on the basis of the collective agreement. It reflects real wages, but also other aspects of labour relations” emphasizes Budza. According to him, employees employed in the informal sector of the economy do not benefit from adequate protection, and once they reach retirement, they can only count on minimum pensions.

Budza believes that actively combating the shadow economy and the phenomenon of “envelope” payments is a solution to increase remuneration levels. He believes that this is very important, given that in a number of sectors, such as education or construction, there is already a shortage of qualified staff in Moldova because Moldovan citizens are receiving more attractive salary offers abroad.

At the same time, according to trade unions, more and more employers are giving up wages “in envelope”. The most significant successes are for big companies, which implement new standards of corporate governance and practice audits according to international rules.

Last year, the revenues of the budget from the VAT on salaries increased by 14% and amounted to $ 3.5 billion lei. Revenue from the mandatory health insurance fund increased by 12%. And in the case of the social insurance fund the increase exceeded 18% – 11.5 billion lei.

The increase of the budget revenues was facilitated by the joint actions of the interdepartmental groups, including the police, the tax authorities, the representatives of the State Labour Inspectorate and the trade unions. SFS counts on an increase in the index in 2018, and explains the trend given by amending the regulatory framework for wage settlements in the real sector of the economy. Only in the first semester the budget received extra about 24 mln. lei as a result of the detection of such violations, such as the diminishing of the salary fund, the income tax, social insurance contributions and compulsory medical insurance. Growth was 15% on average compared to the same period last year.

The authorities believe that even giving up the progressive scale of income tax in Moldova and introducing the single rate for all categories of citizens will lead to improved indices. As a result of legislative innovations, employees need to receive more money, and employers – pay less taxes to the state.

At the same time, the government has set itself the goal of gradually lowering the tax burden on wages, thus removing one of the factors that stimulate the shadow economy.

Source: www.noi.md