Plan to set minimum monthly pay in construction sector at €780

An initiative between state institutions and the Partnership of Latvian Construction Entrepreneurs seeks to set the minimum monthly wage in the construction sector at €780, which is close to twice the minimum monthly pay in Latvia, reported Latvian Radio April 13. 

This initiative, coming from the Finance Ministry and the State Revenue Service on the public side, aims to curb the shadow economy part in the sector. 

Nevertheless, in order to apply to all construction companies, the initiative has to be supported by firms having a total turnover of at least €700 million, or half the industry turnover.

Currently firms with a turnover amounting to €600 million have joined the initiative, said Baiba Fromane, the head of the Partnership of Latvian Construction Entrepreneurs.

Should the required extra firms be found, the new industry regulation could be introduced January 2019.

Data by the State Revenue Service say that about 24% of wages in the sector are untaxed, meaning the state forfeits about €60 million a year in lost tax revenue. 

"I think that, if the deal goes through, within the next few years this will no longer be a problem in the construction sector," said Fromane. 

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