Moldovan finance minister explains key fiscal policy provisions: increased personal allowance, reduced value added tax on basic products, higher excise duties, vice tax

Finance Minister Victoria Belous today presented the main provisions of the fiscal policy for next year. The draft provides for an increase in the personal allowance for employees, maintaining the reduced value added tax (VAT) rate for basic products, increase in excise duties for certain categories of goods and introducing additional taxation on vices.

„The most important change is the introduction of a reduced 8-per cent VAT rate for eggs and chicken meat. We have also removed the maximum rate for property tax from the amendments. We introduced a provision whereby local public authorities would issue annual decisions establishing local rates, so that situations do not arise in which properties have been revalued, but local authorities have not reassessed the rate,” the finance minister said after today’s government meeting, during which the draft fiscal and customs policy for next year was approved.

Through the fiscal policy draft, the government proposed increasing the personal allowance for employees from 29,700 to 40,020 lei.

The draft also provides for increasing the VAT rate for the HoReCa sector from 8 to 12 per cent, while maintaining preferential treatment compared with the standard rate. „We will see how things develop, but for the moment, we are not proposing a further adjustment of VAT for the HoReCa sector,” Victoria Belous said.

The authorities also clarified the taxation of inheritances received by citizens of Moldova living abroad.

„We have provided clarification. I reiterate that the government has never intended to tax our compatriots in the Diaspora,” the finance minister emphasized.

At the same time, starting October 1, VAT will be applied to parcels purchased online from international platforms.

„Each platform will have its own options, also each postal operator, but at the time the goods enter the country, VAT must be collected,” the finance minister noted.

The fiscal policy also introduces clear provisions on the taxes citizens will have to pay when selling homes.

„First of all, we are clarifying the situation for those who did not correctly indicate their domicile. If they sell their only home, which they have owned for more than three years, the state will not tax them, even if they were not registered as living there. This has been a problem for a very long time. People had only one home, did not register it as their domicile, carried out renovations and then discovered that they had to pay tax. We are also introducing a provision stating that, if you carry out renovations, you must keep the invoices, and these expenses will be reflected and allow you to reduce taxable income, something we did not have until last year. If the property has been owned by the person and is their only home, and they sell it starting next year, they will not have to pay tax. This applies only to people selling their only home. We are trying to place on an equal footing those who earn profits from their work and those who earn profits from investing in an apartment. We tax only the surplus or profit, namely the difference between the purchase price and the sale price,” Victoria Belous said.

Another measure included in the fiscal policy concerns the application of a reduced 8-per cent VAT rate for delivered natural gas, up to a limit of 150 cubic meters for each tax period and each consumption point. The VAT exemption with the right to deduct for electricity will also be maintained, up to a limit of 100 kWh for each consumption point. The government proposed that the measures enter into force on April 1, 2027, after the end of the heating season, while vulnerable groups will continue to receive support through compensatory payments.

„We agreed to maintain this 100-kWh limit, but through compensation measures we will try to support vulnerable people,” Victoria Belous said.

The fiscal policy for 2027 also provides for a trajectory of excise duty increases during the next three years. Excise duties on tobacco products will increase by 20 per cent in 2027 and by 15 per cent each year in 2028 and 2029. For nicotine liquid cartridges, the increase will be 15 per cent in 2027 and 10 per cent each year in 2028 and 2029.

The government also proposes introducing an excise duty on nicotine-free liquids meant for electronic cigarettes, in order to prevent the substitution of nicotine products with nicotine-free alternatives.

For cigarettes, a change to the coefficient used for the reference price is proposed, from 1.47 to 1.57. At the same time, the excise tax base will be expanded to include non-alcoholic carbonated beverages with added sugar or sweeteners, as well as energy drinks. An excise duty is also proposed for recreational pyrotechnic articles.

Most excisable goods would be subject to a 10-per cent increase starting from 2027. A sharper increase of 20 per cent is provided for diesel fuel.

The package also provides for the introduction of a 6 per cent vice tax on participation in gambling and lotteries, applied to the funds deposited to top up gaming accounts and to the price of lottery tickets, respectively.

The draft fiscal and customs policy for the 2027 year was approved by the government today and forwarded to parliament for consideration and approval.