New taxes of labor migrants in Ukraine

2019 | 11 | 05 228

The Ukrainian leadership has expressed its intention to take under tight control citizens traveling for work abroad. In our country, deputies took the initiative to create a special fund for zarobitchane to accumulate significant amounts from Ukrainians working abroad in this financial resource.

The deputies of the Verkhovna Rada submitted for consideration of their colleagues draft legislative acts aimed at strengthening the state support of our compatriots traveling to work abroad. The draft laws caused a stir and serious unrest among specialists who provide employment services for Ukrainians abroad. In addition, projects and experts in the labor market are not the most flattering reviews.

The bill reflects several innovative, breakthrough innovations;

  • the formation of a new separate body to control labor migration of Ukrainians (under
  • the leadership of the Ministry of Social Policy);
  • creation of a general register of labor migrants;
  • Formation of a contribution fund for zarobitan residents;
  • drawing up migrant cards.

In business circles, the new body that controls the activity of zarobitchan was secretly called another ministry. There are reasons for this, because the structure of the new body involves the formation of its territorial representations in all regions of Ukraine. It is planned that the new executive body will have a wide range of legal powers:

Implementation of the census of Ukrainian labor migrants, some of whose income will be taxable.

The deductions will go to the Welfare Fund, and the new body will control the process of deductions and maintaining the information base.
The new agency will also provide assistance to Ukrainians in finding employment abroad.
It is assumed that the competence of the department will also include the provision of consulting, legal assistance in the event of labor disputes among workers and foreign employers.
The executive branch will also organize retraining and advanced training programs for the residents who have returned home.
The department’s specialists also plan to provide consulting support to residents of Zarabot who want to engage in entrepreneurial activity in Ukraine.
 The powers of the department will include the following actions:

The provision of social services to migrants.
Conducting educational programs and cultural events.
Formation of information databases of firms and organizations that are engaged in employment: they will be issued certificates for this type of activity and exercise control over their work.
Issuance to a domestic labor migrant before a trip to earn money a draft contract signed by the employer. The document indicates the length of the working day, working conditions, insurance data.
Informing the zarobitan about the features of the state, where he is going to go to carry out labor activities.

How is financing of the department planned?

Significant sums of money will be required to financially support the initiative to create a new body. To collect them, it is planned to create a special Welfare Fund. Its filling will be handled by the State Employment Service, firms providing employment services for migrants and directly migrants themselves, who get jobs through Ukrainian intermediary firms.

In accordance with the content of the draft law, the first deduction for the employer - the registration fee will not be paid by the employee himself, but by the Employment Service or the employment company. Subsequent contributions will be paid by the migrant. They are expected to have a monthly format. So far, the exact amount of the contribution is not indicated in the bill. Also, a scheme for their calculation has not yet been determined. Perhaps this will be a fixed amount, and perhaps a percentage of the salary of a labor migrant.

There are other conjectures on this score: experts close to the creators of the bill report that the amount of the labor contribution can vary from 50 to 200 US dollars per month. For this amount, a migrant worker will be issued two documents: an insurance policy and a labor migrant card. What these two official papers give is not yet clear. And whether they will be at all is also not yet clear.

Along with these unresolved issues, another situation is clear - the Ukrainian migrant worker may refuse to transfer contributions. If a migrant independently found a job abroad, he has the right not to make contributions to the Fund and, accordingly, not to receive insurance policies and labor cards. Interaction involves a purely voluntary nature.

New Tax Information

Experts in the field of labor migration harshly criticized the initiative to create the Fund.

According to V. Voskoboynik, the head of the Association of Foreign Employment Companies, the proposed legislative initiative plans to tax workers with a new tax in the form of deductions to the new state executive body, which will regulate the sphere of interaction between labor migrants and abroad employers.

According to the expert, our country is obliged to render assistance to migrants who are finding jobs abroad even without this innovation. If you follow this principle, you can conclude that tourists also need to take a fee for legal protection and support.

Few people believe in a positive, effective outcome of the proposed initiative. It is assumed that labor migrants are unlikely to deduct cash contributions so that their data are entered into the state register and provide the necessary legal assistance.

The head of the organization "Labor Solidarity" - V. Makhinko also shared his opinion. He believes that collecting financial contributions is a difficult, difficult task. In addition, the zarobitchanin does not make much sense to make deductions. The Ukrainian consulates are required to a priori provide assistance to our compatriots on an unpaid basis.

It is also important that if a Ukrainian migrant works abroad on an official basis, then he automatically receives social and legal guarantees from the country where he carries out labor activities, including medical care and insurance. The execution of these documents costs a lot. In Ukraine, contributions to the union amount to 1.5% of the total. Polish workers pay about PLN 35 per month to their unions. And at the same time, not all employees are eager to make such deductions.

Labor relations experts have little faith that the creation of the Office and the Welfare Fund will allow us to remove the labor market abroad from the shadows and exercise stable control over it. Experts express concern that the initiative will make the situation on the labor market even more complicated, confusing, difficult to control and poorly predicted.

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