Webinar “Gig-economy: labour rights and tax evasion. Ukrainian experience”

with George Sandul, Labor-Expert of the Ukraine NGO "Labor Initiatives"

This webinar looked at precarious work and the implications for public finances. Georg Sandul, a lawyer at the NGO Labor Initiatives, which works closely with the union in the Ukraine, reported that the platform companies in the food delivery industry have also been able to make high profits here since the beginning of the pandemic.

Aside from sales tax, employers should pay 22% to social security for their employees. But by classifying all employees as self-employed, companies can avoid paying taxes. Thus, companies like Glovo were able to save approximately € 15,000 in July 2018. Another way in which platform companies such as Glovo manage to avoid taxes is by not being registered as a food delivery service but as a digital software company that has to pay license fees to the headquarters in Spain. This means that they report less profit is and the basis of assessment is reduced.

In addition, Glovo's bicycle messengers receive payment from the parent company, so there is no data to calculate the amount of the tax. As in other countries, there is then a lack of public funding. The Ukrainian trade unions hope that the argument of the lack of state revenue for the social fund will be taken seriously, so that the support of the government can be won. The stakeholders in the Ukraine also agree with what seems to be the international consensus that the employment of bicycle messengers and fair working conditions are regarded as part of the solution to the deficit in public finances.