“With the increase of the minimum wage to 3,200 , all the money in local budgets will be taken out to pay taxes. Thus, the government, which says about financial decentralization and local budgets preferences, actually drains their funds to pay taxes”, – said the head of the Executive Committee of the European Party of Ukraine Valeriy Klochok.
“As a result of the reform of local government local councils have been transferred powers including the financial autonomy of local communities. Revenues of the local budgets also increased. Especially the budgets of the unified local communities won. They got a fixed 60% of the personal income tax”, – said Valeriy Klochok.
“But it causes some risks. The so-called law of 3200 does not provide increasing of a payroll for budget organizations. If the budget does not provide an increased payroll or if there is a slight increase, the heads of budgetary institutions will be forced to either fire staff or give them half of the wage rate. The situation in business is much worse. Entrepreneurs are obliged to raise the minimum wage. Therefore, we should expect further massive firings and growing of the shadow labor market”.
Press Service of the European Party of Ukraine