SRS: envelope wages are gradually declining in number

Considering that envelope wages present one of the most significant components of grey economy, this year Latvia’s State Revenue Service has performed a study on the situation with non-declared wages or envelope in the country.

In general data for 2017 is positive and envelope wages are generally in decline. Nevertheless, this is remains a common occurrence in the country.
 

The latest study shows that in total non-declared wages formed EUR 927 million in 2017. With that, the volume of non-declared wages in the country was 19.9% or EUR 663.81 million, which is 1.7% less than a year prior.
 

SRS acting director general Dace Pelēkā: «Reduction of envelope wages is a positive signal. It is likely the situation was influenced by both the grey economy combating measures realized by SRS and employers’ own desire to lead an honest business. I believe now is the time to talk to employers and employees to explain to them the importance of social fees, their future pension and other social services».
 

The service adds that an informative campaign was launched this week to reach out to employees and explain important matters associated with wages and social benefits.
 

State Social Insurance Agency Director Inese Šmitiņa: «During this campaign, VSAA will use EDS to send out personalized letters to 413,800 employees aged 18-42 about their social insurance fees and work experience. SRS data shows that in this age group there is a risk for every fifth when wages are paid in an envelope. It is important to reach out to those people specifically because their future pension and other social insurance services depend directly on social fees.»
 

Among the industries that create the largest losses for the country, it is worth mentioning trading, freight traffic, construction, IT sector, real estate, wood processing and seasonal agriculture.
 

At the same time, SRS notes that many of those problematic industries have realized positive changes and have reduced the presence of envelope wages. «A significant reduction of envelope wages has been observed in industries like construction, catering and different kinds of trading. This is largely thanks to those industries’ growing literacy and reforming efforts».

BNN

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