CES proposes postponement of minimum wage increase to UAH 6,500 for 2022
KYIV. Sept 28 (Interfax-Ukraine) – The Centre for Economic Strategy (CES) has proposed that the increase of the minimum wage to UAH 6,500 is postponed for 2022.
"It is reasonable, taking into account such a complex budget and budget expenditures.., to spread this increase in time, for example, up to [UAH] 6,000 next year, up to [UAH] 6,500 in a year, and then depoliticize the decision making process on minimum wage, making it politically indifferent, economy based," Deputy Director of the Centre for Economic Strategy Maria Repko said at a press conference held at Interfax-Ukraine on September 25.
According to her estimates, average wage increase by 30% per year is very high. "This growth is not catching up.., it is not caused by some economic factors or productivity growth," Repko said.
The deputy director of the CES added that budget receipts would grow against the backdrop of minimum wage increase, while expenditures would increase due to the need to raise public sector wages by about UAH 40 billion.
"The increase in budget receipts from personal income tax, single social security tax and single tax can indeed take place due to minimum wage increase, but this growth will have a very negative impact on investment climate, business development and will slightly increase inflation," Repko added.