Moldovan government approves amendments to fiscal reform

Chisinau, 25 July /MOLDPRES/ - The cabinet of ministers today approved a string of amendments to the legislation in force, which provide for carrying out a fiscal reform, in order to stimulate the business environment and increase residents’ revenues.     

Under the draft, the quota of the tax on income of private persons will be cut from 18 per cent to 12 per cent, by introducing a single quota. The share of employer’s contribution to the State Social Insurances Budget is proposed to be reduced by five percentage points, from 23 to 18 per cent. Thus, the fiscal burden will be reduced by ten per cent, the participants in the cabinet meeting said.  

Also, the annual personal exemption will increase more than twice, from 11,280 lei up to 24,000 lei. Thus, the subsistence minimum will not be taxed, which is a novelty for Moldova. According to estimations, these amendments will bring a six-per cent growth of employee’s incomes and a five-per cent of the employer’s ones.  

At the same time, a special fiscal regime is to be established for work in the sector of hotels and restaurants, by cutting the quota of value added tax (VAT) from 20 per cent to 10 per cent, in order to encourage particularly the development of tourism. Taxi drivers with a monthly salary of up to 10,000 lei will pay a single income tax of 500 lei per month.   

Another item of the fiscal reform is the one dealing with the repatriation of currency, through which the pressure on Moldova’s resident economic agents, carrying out external economic transactions, will be diminished. Thus, the repatriation term is proposed to be extended from 2 to 3 tears for the results of all types of external contracts (money, goods, services). Another goal pursued by the draft law is a proposal to decrease the delay penalties – from 0.1 per cent to 0.05 per cent of the sum of non-repatriated means, applied for each calendar day of delay.   

Also, the cabinet proposes measures to reduce the pressure of the bodies with control duties on business and limit the application of the preventive arrest.

The fiscal reform is to be enforced as of 1 October 2018. The draft law is to be submitted to parliament for consideration and adoption.  

(Reporter V. Bercu, editor L. Alcaza)