Why the Retirement Fund was interested in wages of labor migrants

Photo: Roman Pilipey

Statements of the head of the Ministry of social policy on the introduction of Declaration of income for migrant workers has caused a resonance in society. And mention, in this context, unpaid “workers” taxes to the Ukrainian budget has led many to conclude that the government want to introduce a separate tax for the Ukrainians working abroad. Even the Ministry was forced to make a special statement refuting this version. They say that additional taxes will not be, Declaration only necessary for understanding the income of those who claim to be subsidy.

Meanwhile, not so simple. The obligation to declare the income for those applying for the subsidy existed before. As ideas about the replenishment of the state Treasury at the expense of those who earn money abroad. Let’s try to understand this in more detail.

On taxes no one says…

The excitement was aroused by the remarks of the Minister of social policy Andrei Reva in an interview with “Radio Liberty”, published on November 17. In it, in particular, the Minister put it this way:

“The people who work in Ukraine – they pay the tax to incomes of physical persons, pay the SSC. Their income is taken into account. And, as a rule, they do not qualify for a subsidy because they are white, contain and state employees, and retirees, and contain themselves. And someone works abroad and sends money here. This money will be transferred in to the individual household… It’s income or not income? Income because it is used for own consumption. We asked: please declare. Because it is real money that you receive for their own consumption”.

After an idea about wanting to tax the declared income of migrant workers, the Minister said: “the Suggestion that a Declaration of income caused by the problem of calculating the size of subsidies, and not with a view to their taxation”, – quotes his head of the press service of the Ministry of social policy.

Meanwhile, the Declaration of income by applicants for a subsidy – no innovation. To submit a Declaration of income, together with a statement to everyone to whom the grant is assigned for the first time, and many citizens must file returns regularly. So the “workers” or members of their families receiving a subsidy, must have filled out a Declaration of income when they applied for the subsidy. Another thing is that in these declarations, they could not specify their earnings abroad.

According to established practice, Ukrainians often declare only the income that can be verified through any databases. For example, received in the form of wages, scholarships or pensions. But the “gray” income – those that were not held through a Bank, and the documents not associated with a specific recipient indicate not many.

For example, a person who rents an apartment without a contract, most likely, will not indicate in the Declaration the form of profits. As is hardly recognized in the part time job, say, a teacher working in after school tutoring. Or the seller, moonlighting in his spare time repairs. Or a student walking in the evenings other dogs for money. Such work is performed, as a rule, without the paperwork, pay for them in cash, and to verify receipt of such income is impossible.

The same situation with the income of migrant workers. Most of them are working abroad unofficially. In the sense that in no state database or registry there is no information about their places of employment, on wages. Not even the exact information on the number of working abroad, the numbers vary from 800 thousand to 6 million.

Experts believe that to obtain data on the incomes of Ukrainians working abroad, it is theoretically possible, but too costly for the amount of work and time, so to do this, no one will. As still not resolved the issue with the legalization of the rental market. This means that state and then have to take people at their word and attempt to influence by persuasion.

Returning to the issue of the declarations, adding that Ukraine has not abandoned the idea to make a Declaration of income duty. As we wrote, the law on currency and on foreign currency transactions requires the Cabinet of Ministers until December 1, 2018 to develop the draft law on one-time Declaration of incomes for all citizens of Ukraine. We also talked about the fact that the idea of a one-time Declaration of income of citizens hatched a long time, but has been postponed.