The shine of gold and the shadow of private entrepreneurs: how large jewelry chains masquerade as small business

The shine of gold and the shadow of private entrepreneurs: how large jewelry chains masquerade as small business

Jewelry stores occupy the best locations in shopping centers and on the central streets of cities. Advertising is expensive, showcases shine, brands demonstrate scale and success. But if you look into the papers, the picture becomes much more modest.

Formally, most of this «golden business» looks like dozens or even hundreds of small entrepreneurs. Large chains simply break down their activities into individual entrepreneurs (FOPs) operating under a simplified taxation system. As a result, billion-turnover operations pass as the business of «small entrepreneurs».

Official statistics look almost touching. The average salary in the industry is about 8–9 thousand hryvnias. However, on the labor market, the same jewelry store salespeople are offered 20–30 thousand and more. The difference simply gets lost somewhere.

Another scheme — sales without fiscal receipts. In this case, part of the revenue doesn’t enter the reporting at all. And the gold chain suddenly becomes not only jewelry but also an excellent way to optimize taxes.

For example, the «Golden Age» chain has about 350 stores across the country. Formally, these are hundreds of FOPs with an average official salary of about 4 thousand hryvnias. But in job postings, the same employees can receive 14–45 thousand. Estimates suggest the chain’s turnover may reach about 10 billion UAH per year.

Gold in the showcases shines, turnovers are counted in billions. But taxes, it seems, get lost somewhere between the FOPs. And this is just the beginning.