Each month Country Y (which shall go nameless) requires all
enterprises to file four separate payroll declaration forms, containing
essentially the same information. Companies are subject to payroll inspections
by six separate agencies. Payroll forms and inspection results are not shared
among the agencies. The forms must be filed in hard copy, and usually must be
delivered in person to each of the four agencies. Forty percent of the companies
that had been inspected said they had received visits from representatives of
two or more agencies during a short period, a procedure described as extremely
onerous by every enterprise manager surveyed.
The social fund agencies, for their part, are inundated with the
monthly reports, which burden their staff with so much paperwork they have no
time to review and analyze them. One agency representative said, "Monthly
reporting is hell for us."
Why all this effort? Because payroll contributions to social
funds, health, pension, unemployment, disability, education, and so on are not
being paid. On closer inspection, however, it turns out they aren’t being paid
mainly by the long-bankrupt state-owned or formerly state-owned large
enterprises. But as these companies are bankrupt, agency inspectors hardly ever
visit them. Instead, they focus on small and medium enterprises. Although these
companies are rarely in arrears, the inspectors have broad discretion: they will
always find something wrong. The real reason for all this seems to be to benefit
the army of inspectors: When last checked, the going rate to make an inspector
go away was about $40. Not bad in a society where the average monthly salary was
around $120.
