Tax and accounting insights for Ukraine
06.02.24 00:00
0

"Paid" employee booking: is it possible?

"There has been a lot of discussion around the proposed concept of reservations by paying an increased fixed military fee per employee over the past few days. There are fair comments and suggestions, and there are outright lies and manipulations. Below are four of the most common arguments against and counter-arguments for this model, as well as for the reservation itself.

All in one place to save you the time of reading hundreds of comments on this topic. So:

1. Reservation creates a "war for the poor" because not everyone has the money to pay for it.

"War for the poor" as a narrative is, firstly, artificial and untrue, and secondly, harmful, because it has a specific goal - to demoralize both the military and civilians.

I won't even mention the fact that the Armed Forces of Ukraine have a very competitive white salary, almost twice the national average, even if you are not at "zero".

Therefore, our defenders are definitely not "poor," and we should not humiliate them.

In a sense, the Armed Forces of Ukraine is a very competitive employer in Ukraine today, both in terms of salaries and the ability to legally go abroad on a business trip or vacation.

I will only say that there are a large number of entrepreneurs, professionals, specialists in various fields of various sizes serving in the defense forces, who definitely did not go to defend the country for money or because they could not avoid service by legal or illegal means.

Therefore, I would dismiss this narrative as hostile and harmful.

Unfortunately, this narrative is very easy to evoke emotion and cite it as an argument against, but it does not offer a solution to any issue, only populism and further stratification of society.

We are all interested in victory, which will be brought closer by an optimal balance of front and rear. That is why it is necessary to offer tools that will balance the defense forces and their material and financial support without disrupting mobilization.

If anyone has illusions about those who are called "rich" in society, believe me - in two years they have all "solved" their problems.

Most of these people have fled abroad and are now giving us all advice on how best to organize defense here and which landing site to storm.

In Ukraine, there are those who have consciously decided that their home is here, who are ready to fight for their country and support those who are fighting at all levels in all possible ways.

Therefore, what this model actually offers is an improvement of the system of mobilization of all resources, both human and material and financial, and the adaptation of this mobilization to the modern way.

Then our partners will look at us differently.

2. Corruption risks arising from the fact that you provide a legal way to "pay off".

Paying off is illegal, it is actually encouraging corruption.

The people who paid off were freaks and egomaniacs who don't care about this country, the people who are defending it, or how this war will end.

They also didn't care about the economy, the Armed Forces, or all of us together.

We are talking about a multiple increase in business funding for the Armed Forces of Ukraine, while retaining critical employees who allow businesses to spend more on defense.

Our model proposes to increase the financial participation of business in supporting the Ukrainian army.

And to avoid corruption, we propose to transfer the decision on the list of reserved persons at the enterprise from the state to the manager.

This should become the responsibility of the owner to the team.

There is simply less trust and space for dialog between the state and a person than between a person and a person.

Further, if the manager hires, for example, newly hired employees with a dubious set of skills or experience, the team itself will rebel, and perhaps even report the matter to the authorities.

Then no one will be hired at all. This is a zero-sum game.

That is, both the team and the management will need to find a balance and form this list in such a way that the team agrees to be on this list, because we are talking about booking up to 50% of those liable for military service.

It is this form of self-organization that minimizes violations and is definitely better than the state interfering in this process and unilaterally pulling people out of the team.

As for the creation of a new LLC to manipulate the booking of anyone for money, let me remind you that for 5 booked people, there must be 5 unbooked people, because, again, the limit is 50% of those liable for military service.

As you can imagine, it will be very difficult for the "dealers" or "hares" to find people willing to cover them up and become "donors" for their armor, who are guaranteed to be left without armor.

And even if they do find them, who will pay money for a scheme that does not provide guarantees? After all, an LLC with signs of fictitiousness will immediately come to the attention of the controlling authorities.

3. Paid booking will lead to inflation.

In fact, inflation risks will decrease.

Firstly, the increase in the military fee for a booked person is a voluntary tax, and the state receives funds that are not critical for business, which means they can be used for savings or not withdrawal of capital, that is, funds that would not necessarily work in the Ukrainian economy.

Secondly, instead of businesses keeping such funds on their accounts or converting them into foreign currency, the state compensates for the state deficit, which, as you know, is the main source of inflation.

4. Reservation is only in the interests of civilians

This idea is much broader than reservations, but for some reason journalists did not mention it.

Although, perhaps it is better that it was not immediately lumped together.

Increasing business funding of the army in our proposal involves not only covering the salaries of the military (by the way, I would advise you to calculate this amount per year to understand how much money we need).

This model will also allow us to lay the foundation for the Policy of the Future of the Military in society, as the basis for the current and future elite of our country, through the expanded participation of entrepreneurs in financing the army and the accumulated amounts.

The proposed model, even after mobilization, can support the financing of material benefits for the military and their families, but in addition, we would talk, for example, about labor guarantees in the form of guaranteed employment of the military in state institutions at all levels.

These proposals are currently being discussed and agreed upon.

Verkhovna Rada Committee on Economic Development
Для того, чтоб распечатать текст необходимо оформить подписку
copy-print__image