Archive for June 14th, 2010

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Back in Black…..Economy That Is

June 14, 2010

Well dear readers, as much as Back In Black is up there with AC/DC’s very best albums, I am writing about the Ukrainian economy.

Interfax-Ukraine

About five million out of Ukraine’s 20 million working population receive unofficial salaries in Ukraine today, the Trade Unions National Forum reported.

According to the statistics, the working population in Ukraine numbers about 20 million today, Deputy Chairman of the Trade Unions Forum of Ukraine Hryhoriy Kabanchenko said at a press conference in Kyiv on Friday.

According to the Trade Unions National Forum, about 4.6 million people obtain unofficial salaries today in Ukraine, while the International Labor Organization counted 4.7 million of such workers.

In addition, out of up to 400,000 illegal immigrants working in Ukraine, only 15,000 are working legally, the organization reported.

Kabanchenko emphasized that if those five million workers who obtain unofficial salaries contributed to the pension fund “we might see a surplus of the Pension Fund.”

In particular, this refers to the people working in agriculture, at the markets, construction sites and seasonal workers.

“Bringing salaries out of the shadows is of great importance in Ukraine today,” Kabanchenko said.

So from a nation of almost 46 million people……..only 15 million pay tax (and who knows if they are even paying the right amount of tax……I pay what I am asked for……..but the tax system is so difficult to navigate it seems even those which enforce it have little clue).

Is it at all surprising that 15 million people cannot support the State economy designed to supply some form of care, education, defence et al of 46 million?

The inclusion of those 5 million working exclusively in the black economy would at least move Ukraine closer to a balanced budget……..after all it is a 25% increase in the tax base. 

The new tax code will be interesting to read and even more interesting as to whether it will improve not only revenues but ability for collection from 1st January 2011.

I somehow suspect business and companies will be targetted first as they are easier to find.

Any which way you look at this though, 15 million tax payers cannot support a nation of 46 million.

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