Ukrainian Social Policy Minister Andriy Reva says 40% of Ukraine’s economy remains in the shadow, therefore the developed countries’ standards of solving economic problems cannot be effective in Ukraine, while de-shadowing will bring more money to the wage fund than the actual economic growth.
“This was proved by the government in 2017. The entire wage fund in 2016 amounted to UAH 584 billion ($22.3 billion), while the Economic Development Ministry forecast it might grow by UAH 82 billion ($3.1 billion). However, the Ministry of Social Policy said the figure was understated and predicted the growth of the fund by UAH 212 billion ($8.1 billion). In fact, the payroll budget in 2017 totaled UAH 796 billion ($30.4 billion). We received UAH 212 billion in the budget with a 2.5% economic growth. Where did this money come from? The answer is very simple – from the shadow economy and as a result of a 50% raise of minimum wage,” Reva explained, as reported by the ministry’s press service.
The official noted that practical conclusions needed to be drawn from the fact.
“For example, if UAH 6 billion ($229.4 million) in revenue is under-received in the first quarter, and the Finance Ministry says there is no money, it will always be that way if minimum wage is not raised,” the minister stressed. (UNIAN/Business World Magazine)