Minister Helena Dalli addressed the conference “EU framework for combating undeclared work.” The conference was opened by Croatia’s Deputy Prime Minister and Minister for Social Policy and Youth Milanka Opacic.
Minister Dalli said that for policies in the area of undeclared work to be effective, all the relevant departments including the department of Labour, the department of Social Security, the Tax Compliance Unit, the Vat Department and the Police Force must work together to ensure better law enforcement.
She said that policies must focus on preventive and curative measures such as introducing awareness campaigns on consequences of undeclared work targeted at enterprises, workers and the general public. It is also necessary to design policies and measures to encourage compliance by preventing people from taking up undeclared work.
Dr Dalli mentioned the initiatives taken in Budget 2015 which will help to mitigate the problem of undeclared work by decreasing the incentives for those involved in the black economy and to discourage them from continuing such illicit practices.
The Minister said that minimum wage incomes are exempt from income taxes (due to this income difference, the individual might stop from living on social benefits and undeclared work and start working in a legal manner or try to find a new job).
She said that businesses shall be obliged to register with the VAT department irrespective of their yearly revenue. The threshold that applied for non-registration for VAT purposes has now been lifted and all traders should register for VAT purposes and be obliged to file VAT returns and where applicable, pay VAT dues. This in itself serves as an obligation on the trader to declare income, both for VAT and also for income tax purposes.
Dr Dalli explained how the provision of free childcare could also help towards the problem of undeclared work as this service is given to those parents who are legally gainfully occupied. This condition could encourage the uptake of legal employment by parents who want to have access to this service.
The Minister mentioned the Youth Guarantee Scheme which requires all those under 23 years of age that are claimants of social benefits to enter an 18-month programme involving vocational courses and traineeships. This implies that all those (in this age bracket) who are claiming benefits while engaging in black market employment will be incentivized to regularize their position.
The conference was also addressed by various EU member state ministers, high level government officials and university professors working in this area of policy.