The Verkhovna Rada has postponed effectuation of the package of laws on fighting corruption until the New Year. These laws were adopted in June 2009 and were slated to take effect on April 1 this year. In particular, the ban on private entrepreneurs to combine their business activity with hired labor was deferred until January 1, 2011. This is how the state plans to clamp down on companies that minimize taxes by employing private entrepreneurs to avoid making social security contributions.
"Previously, only civil servants such as MPs and military officers were banned to be engaged in private business. But after the adoption of the law "On the Fundamentals of Preventing and Fighting Corruption", auditors, public notaries, corporate officials and international organizations employees, in particular their directors, chief accountants and department heads, have been included on the list,” says lawyer Klim Bratkovskiy. “Now, the law taking force has been postponed, meaning top managers of companies can continue running their private businesses until the end of the year, while private entrepreneurs in addition to their business income and still receive a salary of employees that may be higher than the market average since employers do not have to make social contributions. Currently, seven bills repealing the ban on combining hired work and private entrepreneurship are registered in the parliament, meaning it is quite likely than ban may be cancelled outright before the New Year.
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