The reduction of the tax burden would decrease the undeclared work

 
Simplification of the social system and payments at the state social security budget, and the simplification for payers of tax burdens are necessary to motivate employers and employees to avoid practicing the undeclared work. Also, it is necessary to increase the number of qualified personnel within the Labour Inspectorate. These are some of the conclusions of the 13th edition of Social Monitor, entitled "Applying best practices to reduce the incidence of undeclared work in Moldova", today, July 18, 2012, by Viorica Antonov, associated expert of IDIS "Viitorul".

"Regarding the social security, the undeclared work and paying wages in the envelope have serious implications for social security and health, for the respect of the allowance right and the right to be insured against accidents at work," said Viorica Antonov. According to data reported by the Labour Inspectorate for the period January - March 2012 were elaborated verbal processes and registered 21,062 violations of labor laws, of which 9024 were violations in labor relations and 12,038 respectively on safety and health violations at the workplace.

"Currently, penalties are very small as to discourage economic agents and individuals to not pay envelope wages. In this respect, we affirm that is necessary to exist a serious motivat and to believe that the experience of other countries may suggest some policies from the perspective of more efficient institutional design that could improve the reduction of wages in envelopes” considers Viorica Antonov.

In the Monitor, the author proposes a number of recommendations on reducing the undeclared work, including: a well thought compensation and benefits package for employees and a harmonized tax policy for employers; finding efficient ways to identify cases of undeclared work. For this, is used the intersectoral control when the relevant institutions make controls simultaneously, based on mutual agreements of cooperation.

The author presents work practices to reduce undeclared work in other countries. Thus, in Italy, employers are punished with administrative amends ranging from 1500 to 12,000 for each unreported employee and, a penalty of 150 Euro for each day of undeclared work. In Poland, the maximum amount of the amend for illegal employment and undeclared work practice varies from 250 Euro to 7500 Euro per person. More information can be found in the Monitor.

The Monitor includes a discussion platform, where are found positions of institutions representatives responsible for the eradication of the informal work. Is about Gheorghe Sircu, Head of policies wage Department from the Ministry of Labour, Social Protection and Family; Dumitru Stavila, General Inspector of the Ministry of Labor; Ana Moldovanu, head of the socioeconomic protection  Department, National Confederation of Trade Unions.

The informal employment and the undeclared work generates huge losses to the national budget. For 2010, according to recent estimates, the State Social Insurance Budget (BASS) lost approximately 2.1 billion lei, the State Budget (SB) - 1.6 billion lei and Mandatory Health Insurance Funds (MHIF) - 1 billion. In this context, it is estimated that the national budget will suffer tax losses about 6% per year, which amounts will reach over 6 billion USD over the next five years.

The Social Monitor is a product of IDIS "Viitorul", which captures the evolution of the most persistent social problems, suggesting solutions to deal with them. The bulletin is prepared in cooperation with the Friedrich Ebert Stiftung Foundation.

For more information, contact: Project Coordinator, Ghenadie Mocanu, tel: 221 844, e-mail ghenadie.mocanu@viitorul.org