Volodymyr Dubrovsky, ‘Case Ukraine’ Center for Social and Economic Research economist, explained to the ‘Holos Stolytsi’ broadcaster, how one can legalize Ukrainian salaries.
The government has today claimed it will increase both the living and minimum wages up to 3 200 hryvnias. In this regard, private enterprises were urged to prepare for the minimum wage increase since January 1, 2017.
‘This is not the way one could legalize country`s salaries. To do this, you need to remove such a thing as a single social payment. There is a saying: if the horse is dead, dismount. So, we must recognize that pension system based here on such payments (in fact, on taxes on labor) has died. It could not work in Ukraine`s current demographics we experience. One has to execute a real pension reform, but the social ‘block’ in our government has no wish to do that. Pension fund is half funded by the budget. It has to be liquidated. We should face it: we pay taxes, and these taxes are directed to cover pension payments. Let us pay other taxes than the tax on labor. As a result, salaries would be ‘white,’- said Dubrovsky.