Additional tax on working population would reduce Social Security Fund deficit but unlikely to support unemployed
The Labour Ministry proposed to create an insurance fund within the Social Security Fund for Population at 0.5% of the payroll, which would ensure that people, who had lost their job, received at least 60% of the most recent wage for up to six months. Taking into account current wage level and employment in the economy, the additional tax burden on enterprises would total circa BYN 125-130 million. In 2016, more than 100 000 people were laid off on a net basis, which means the planned amount would not cover the need in benefits. It would be reasonable to expect that the authorities continue to increase the tax burden on profitable enterprises. Unemployment benefits are likely to increase too, albeit without being tied to the most recent wage. Meanwhile, by reducing the Social Security Fund deficit, the authorities would reduce budgetary assistance to the Fund. Creating an insurance fund would not solve the unemployment issue, as only a sufficient number of jobs in the economy would make it possible to avoid the increased tax burden on enterprises.
According to Belstat, in August 7,600 people were dismissed, including 4,800 civil servants. Dismissals of civil servants were due to the optimisation in the public administration by up to 30%. Some civil servants would retain their job however would lose the status of a civil servant. Vacancies on the labour market are likely to reduce in number, thanks to the optimisation, the state administration would increase wages for public servants. The payroll fund for retained employees is likely to increase and some former state employees are likely to get jobs in affiliated organizations. The optimisation of the state apparatus should complete by January 1st, 2018, and some former civil servants are likely to join the ranks of the unemployed.