New joint working stage on the reduction of level of the undeclared employment

Press service of the State Tax Service of Ukraine, published 06 March 2023 at 16:45 Chapter: News

In conditions of a full scale war, when all forces and funds of the state are aimed at approaching victory, the undeclared employment and informal economy cause irreparable damage to the state’s defense capability. In trying to increase their profits, some employers avoid conclusion of employment contracts and, accordingly, payment of taxes.  

State Tax Service and the State Labor Service are united with other bodies to activate work aimed at overcoming phenomenon of the undeclared employment.

Efforts are made through cooperation and social dialogue. For this purpose, departmental working groups have been created in the Interregional territorial directorates of the State Labor Service, which form road maps of bringing employment relations in line with legislation at the regional level. State bodies, local self-government bodies and social partners are involved in this work.

At this stage, work is organized on the identification of business entities that do not get into employment contracts with employees and their list is formed in order to organize further measures to stimulate such employers to proper employment.

In order to inform business entities about risks of the undeclared employment, the State Tax Service of Ukraine sends information messages developed by the State Labor Service to all taxpayers. Such work is a part of joint information campaign regarding the role of registration of employment relations in conditions of the martial law in ensuring economic stability of the state.

We draw the employers’ attention that it is not just a legal obligation, especially in times of war, but a civic duty. Losses from undeclared employment amount to more than 100 billion UAH per year, which would increase the state’s defense expenditures.

Responsibility for the use of employment of one unformed employee can reach 201 thousand UAH.

For these funds, it is possible to pay salary at the minimum level (6700 UAH) for two years, to pay all taxes and levies and to be a responsible employer!