Concept of new fiscal policy to be presented in Moldova by August 6

The concept of the new fiscal policy, drafted after consultations with stakeholders, is to be presented by August 6. Prime Minister Vasile Tofan today made a request to this effect, who stressed that the reform was complex, but necessary.

Vasile Tofan pointed out that the new draft must include a reduction in labor taxes and investment taxes, in order to encourage more people to work and invest. In turn, these reductions must be offset from other sources, including excise duties.

"Tax reform. It is a complicated subject. The first attempt to carry out the tax reform was not successful, to put it more delicately. In fact, it was a failure. We must admit that it came at a very bad time, together with the MoldATSA scandal. Now, I want us to be a cabinet which, as we committed on July 21, calls things by their name and does not avoid complicated topics. We need to implement the tax reform. We need to lower taxes on labor, we need to lower taxes on investments, in order to encourage more people to work and to invest. But these reductions must be compensated from elsewhere. We will probably have to compensate through excise duties – on tobacco, alcohol, gambling and other products. They are easier to adjust. The excise duty on diesel is a complicated issue, but there we will return the money to farmers," noted Prime Minister Vasile Tofan.

A separate topic that will be addressed is the value-added tax (VAT).

"We will probably have to return to the VAT issue as well. I heard the feedback from last time, I heard it clearly and I believe we need to incorporate it as much as possible. Still, we will have to take certain steps towards unifying VAT. Perhaps gradually, not all at once to 20 per cent. Possibly a gradual increase. It is a sensitive topic. That is why, I ask the ministers not to venture into promises about what will and will not be," said Prime Minister Tofan.

In the context, Prime Minister Vasile Tofan asked the Finance Minister Victoria Belous to present the fiscal policy draft by August 6.

"I am taking responsibility for this reform and I will be personally involved in drafting it. I am not placing the whole burden on Ms. Belous, but I will be quite involved and I believe we must work as a team," concluded Vasile Tofan.

The Finance Ministry has earlier proposed a draft fiscal policy which was consulted with stakeholders, and some of the initiatives sparked a string of discontents in society.