Entrepreneurs Say the Problem of Envelope Wage Has Increased

The survey conducted among the entrepreneurs of the Estonian Chamber of Commerce and Industry revealed that during the recent years the number of entrepreneurs who think that an increasing number of people in Estonia are paid envelope wage has grown. The Tax and Customs Board has taken the problem of envelope wages as its priority for the coming years.

“The increasing importance of the problem is highlighted by the fact that fewer and fewer respondents estimate the envelope wage payment to be close to zero in their sector. Instead, there number of entrepreneurs who think that the share of envelope wage in their sector is higher is growing,” said Mait Palts, Director General of the Estonian Chamber of Commerce and Industry when commenting the results of the questionnaire.

The results revealed that construction, hospitality and catering, art, entertainment and recreation are the areas of activity that are considered to be the most problematic. “Transportation and warehousing were also highlighted, 30 percent of the representatives of these sectors estimated the envelope wage to be even 31-50 percent of the paid salaries,” said Palts.

Valdur Laid, Director General of the Tax and Customs Board said that the results of the survey confirm to the Tax and Customs Board the visible risks arising from the slight deterioration of the attitudes related to the payment of envelope wage. “We are working to decrease the favouring attitude towards the payment of envelope wage and that people would perceive that only thanks to the payment of taxes we all have access to such services as pension, health insurance and education. At the same time, we are also thinking of new opportunities that would help to combat the problem of envelope wage in specific sectors in a focused manner,” said Laid.

With respect to new solutions, 68 percent of the entrepreneurs who responded to the questionnaire considered it important to extend the responsibility for agreeing with envelope wage to employees. The share of employees who estimate using stricter control measures as an efficient tool for combating envelope wage.

“In cooperation with the associations of the sectors we have discussed the online cash register systems solution and the client’s liability in the construction contracting chain,” added Laid.

“For years, the Estonian Hotel and Restaurant Association has cooperated with the Tax and Customs Board as well as Estonian Chamber of Commerce and Industry in the name of an honest tax environment. Despite of that, the share of envelope wage in our industry is one of the highest,” said Verni Loodmaa, Chairman of the Board of the Estonian Hotel and Restaurant Association. “It is important to continue active informing work in order to ensure honest and fair competition in the sector,” he added.

The Chamber organises the envelope wage questionnaire among its members since the year 2014. This time there were 242 respondents.