The State Fiscal Service of Ukraine, or SFS, is deepening its crackdown on unofficial employment, the government agency’s head Oleksandr Vlasov said in a statement on Jan. 24.
A new regulation proposed by the SFS would help the government identify unreported incomes and take them into account when calculating those workers’ public benefit eligibility. The draft would also improve information sharing between the SFS, the Ministry of Social Policy, the State Employment Service and the Pension Fund of Ukraine.
The affected benefits would include housing subsidies, unemployment assistance and others. Workers who underreport their incomes stand to lose some or all of their eligibility for government assistance if the new regulation passes.
“The information we gathered… showed the necessity of expanding these measures,” stated Vlasov.
The draft proposal has been forwarded to the Ministry of Finance for review, according to the announcement.
The SFS is engaged in an ongoing battle with the “shadow economy.” Unofficial employment, in which employees’ income goes unrecorded allows Ukrainians to avoid paying some of their taxes and to qualify for more benefits than they’re entitled to.
According to the SFS, measures to “deshadow” the economy enacted since September 2018 have already added over HR 1.3 billion to the state budget, including Hr 590 million in income taxes.
These measures included SFS workplace inspections and helped add 1.9 million employees to official rolls, according to the service.
Additionally, the SFS created a series of draft rules aimed at eliminating casual employment in sales, food service, construction, agriculture, transportation, medical care and other services.
“These measures have allowed us to not only increase budget allocations but also ensure the protection of employees’ rights,” Vlasov stated.
According to various global estimates, anywhere between one third to one half of Ukraine’s economy remains in the shadow.
