In an effort to combat the shadow economy, the government intends to introduce electronic work registration in the construction field, a move supported by construction companies hoping for a personal work photo ID system similar to those already in place in neighboring countries.
According to a outline drawn up by the Tax and Customs Board (MTA), the Police and Border Guard Board (PPA) and the Labor Inspectorate, construction companies being required to report employees' time spent on site as well as regarding subcontractors would help support more honest competition by ensuring that individuals on construction sites have been properly registered to work and are receiving legitimate wages for all hours worked, daily Postimees writes (link in Estonian).
While the registration of employees with the MTA helped curb an issue that cost the state over €20 million in unpaid taxes in 2018, the practice of paying wages partially under the table only spread, and did not help police ensure that foreigners working in construction are residing and working in Estonia on a legal basis or that their wage conditions are being fulfilled.
The Estonian Association of Construction Entrepreneurs (EEEL) supports a system of personal work photo IDs, which would not require replacement each time an worker signs a new employment contract, an idea likewise supported by the Estonian Chamber of Commerce and Industry as well as construction companies; similar systems are already in use in Finland and Latvia, for example.
According to the MTA, such a solution will cost the state some €700,000-1.2 million to develop and bring in some €5.7 million in additional taxes each year.
Editor: Aili Vahtla