Policies pursued by government influence underground economy

The National Employers Confederation presumes that the number of employers who prefer to work in the underground economy is on the rise. Such a situation is mainly influenced by the latest policies pursued by the government, which press the businessmen more and more, the Confederation’s chairman Leonid Cerescu stated for Info-Prim Neo. “I do not possess statistical data, but I assume that more employers decided not to honor their obligations towards the state and to work illegally following the reintroduction of the income tax of 12% for private individuals this year. There was excluded the limitation of taxation at the level of local public bodies, while the obliging of the employers to pay for three days of sick leave to the employees is a kind of hidden tax as we do not pay 23% as they say, but more,” said Leonid Cerescu. He also said that the dividends are now taxed and the powers of the inspection bodies increased, as the penalties. “I think these factors determined a rise in the number of employers who avoid fulfilling their obligations to the National Social Insurance House and the National Health Insurance Company. Theoretically, this is possible, while practically I don’t know as I do not possess data,” stated Leonid Cerescu. According to him, the employers cannot be satisfied when additional taxes and constraints are imposed, with the latest policies applied being perceived as a constraint. “However, some of the employers say the pressing and taxation level in Moldova are much lower than in other countries of the region. This means that the conditions for businessmen in other states are worse,” added the Confederation’s chairman. Asked if these factors can lead to the bankruptcy of a large number of businessmen, Leonid Cerescu said that the bankruptcy process is a continuous and natural one because those who cannot manage their businesses risk going bankrupt in conditions of competition, while the competition in Moldova is stiff.