For the state, undeclared work means loss of tax revenue and this has an impact on the citizens. The serious economic costs are an injustice for those who work legally. Those who hire persons unofficially do not pay taxes and are this way at an advantage compared with those who work legally, President Maia Sandu stated in an international conference entitled “Moldova goes white: Solutions for encouraging transition to legal work”, IPN reports.
Minister of Labor and Social Protection Marcel Spatari said the phenomenon of illegal work should be monitored and penalized. Mechanisms should be worked out to stimulate legal labor. In this regard, labor inspectors were stimulated by pay raises. The administration of the State Labor Inspectorate will be reorganized and better cooperation relations will be established with the State Tax Inspectorate.
According to Marcel Spatari, an innovative mechanism for subsidizing pay raises and whitening the part of the salary that is now paid unofficially was designed. “By this mechanism, we aim to make sure that a part of the deficit that now goes from the state budget to the state social insurance budget is covered by business entities. Respectively, the business entities during the transitory period will benefit from fiscal loans for the additional cost of salary whitening. This is a measure designed to stimulate tax compliance of small entities,” noted the official.
The minister said the minimum salary should be an item of the political agenda in Moldova. An important step was taken together with the unification of the minimum salary. “We will never be able to have an absolutely objective mechanism in the adjustment of the minimum salary. We must return to this discussion each year and consider where we are and how we can advance,” stated Marcel Spatari.
Minister of Economy Sergiu Gaibu said that when the citizens see how their contribution turns into social benefit or the future pension, this makes them trust the state more. Moldova needs industries with high value added so that the young people with higher education enjoy more opportunities. The priority sectors for investments, such as the IT sector, need to be identified.
In July, the Ministry of Labor and Social Protection launched a nationwide information campaign titled “We go white” and an initiative to design the national plan for combating undeclared work. The public was informed about the benefits of legal work and about the system of subsidies provided to employers.
