Andriy Zhurzhiy: Government proposes to increase the payroll costs for employers

With all due respect to Andriy Reva, the attempts to restore the graduation for the unified social tax accrual (until 2016  there were 78 rates in Ukraine), as well as attempts to remove the upper limit for the unified social tax accrual will not result in simplification of administration and removal of hundreds of billions of shadow salaries in Ukraine.

The Pension Fund of Ukraine is bankrupt!!!

First of all, from the point of view of the future pensioners’ trust!

The government proposes to increase the total costs of employers associated with employees! While we could just raise the employees’ salaries.

And one more thing: today no one is willing to pay to the Pension Fund preferring to receive envelope salaries.

What we need to do, in my opinion:

– to liquidate unified social tax/quasi tax from 01/01/2018! – as it was proposed in 2015. So that none of the ministers could even think about raising anything!

– to remove the state from pension savings and liquidate the Pension Fund;

– to introduce a pension insurance accumulation system – the more you have accumulated the bigger pension you have;

– to switch to payment of the minimum social pension from the state budget for the low-income strata of the population;

Who said that those miserable amounts of money the state today provides pensioners with has to be paid by the Ukrainians working today?!

– to reduce the overall burden on the wage fund by 20-25%.

Given the fact that in the first 4 months of 2017 the total income from personal income tax and unified social tax from the wage fund increased by 7.3 billion hryvnias or 35% compared to 2016, Ukraine can afford a gradual decrease in the tax burden on wages by 2-3% per year.

And if we really want to protect workers, let’s introduce mandatory insurance for employees involved in harmful industries.

I think that the private sector will easily cope with this task!

Or is someone really interested in preserving a special state fund which is pumped up with money and whose managers are caught in bribery scandals at least once a year?!

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