Member of Parliament Danylo Hetmantsev (Servant of the People faction), who chairs the parliamentary committee on finance, taxation, and customs policy, estimates that more than 95% of businesses pay salaries in envelopes in full or in part.
Hetmantsev stated this in an interview with the Ukrainian News Agency.
"This is a mass phenomenon, but it is difficult to provide a specific figure. How do you propose to obtain it? Conduct a survey? Do you receive your salary in envelopes? I am sure that [the answer would be] yes. All mass media organizations pay salaries in envelopes. According to my estimates, more than 95% of businesses pay salaries in envelopes in whole or in part," he said.
According to Hetmantsev, a study estimates that the loss of state budget revenues because of this phenomenon could be up to UAH 100 billion.
He expressed a negative attitude to the mechanism via which enterprises register their employees as sole proprietors.
"I do not have a positive attitude to it. It is a tax-evasion scheme within the current legislation, and we do not plan to oppose this process actively, at least in the near future. This problem should be resolved within the framework of the income tax reform that I spoke about earlier. Along with the reduction of the tax burden on incomes, we must reduce the opportunity for a sole proprietor to work with legal entities based on the provision of services. It makes no sense to lower tax rates if we leave the opportunity to pay salaries through a sole proprietorship because even the reduced rates will still be higher than 5%,” he said.
As Ukrainian News Agency reported earlier, Hetmantsev is not considering an extension of the tax amnesty.
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