Moldovan parliament speaker says removing tax, legislative discrepancies between two banks of Dniester River to bring concrete benefits for citizens

The gradual removal of tax and legislative discrepancies between the two banks of the Dniester River will bring concrete benefits for citizens. Parliament Speaker Igor Grosu today made statements to this effect, after Tiraspol had asked Chisinau to abandon the new tax provisions.

The draft law was adopted today by MPs in the second reading. The legislative amendments aim to ensure a uniform tax and customs regime throughout the country, including for individuals and legal entities from the eastern districts. Thus, the financial means got from taxes and duties will be directed to a Convergence Fund.

“Dear citizens on both banks of the Dniester River! This law is meant to support people, by providing access to quality services, education, healthcare, energy efficiency projects and other important things for our citizens. I assure you that these actions are for the benefit of the citizens,” Igor Grosu emphasized.

The first tax exemptions will be removed this year for products considered socially non-essential, such as alcohol. As a result of the adoption and implementation of the draft law, the import and sale of these products in the districts on the left bank of Dniester will be subject to value added tax (VAT) and excise duties, just like in the rest of the country.

“The uniform implementation of taxation will put all importers on an equal footing, eliminating excess profits obtained from tax evasion, which often fueled unconstitutional power structures,” reads the explanatory note to the draft law.

Legal provisions granting VAT exemption for the supply of balancing electricity to economic agents that are not connected to the national budget system have also been removed, as well as VAT exemption for the import and subsequent supply of natural gas under tariff position 2711 by the Moldova-Gaz joint stock company to Tiraspoltransgaz limited liability company, which has no relationship with the national budgetary system. These provisions will enter into force on 1 January 2027.

At the same time, at the government’s proposal, the document was supplemented with provisions concerning VAT refunds for farmers. Thus, the amount of VAT subject to reimbursement is 40 per cent of the amount of VAT deductible in the following tax period.

The accumulated funds will be directed to the Convergence Fund and will be used to modernize infrastructure, develop projects and programmes to support the business environment and citizens in the Transnistrian region. The amount of financial resources will be approved through the annual state budget law. The fund will consist of a certain share of the taxes and duties paid by individuals and legal entities from the Transnistrian region, as well as financial resources provided by external partners.

Full implementation of these measures will bring the state budget additional revenues estimated at approximately 3.3 billion lei annually.

The document enters into force on the date of its publication in the Official Journal.