President: Government should not rush with tax reform. Draft must be revised before approval

President of the Republic of Moldova Maia Sandu believes that tax reform is necessary, but the Government should take more time to analyze the proposals and criticisms made before approving the final version.

Asked about the discontent generated by the tax reform draft and calls from some voices in society to withdraw or rethink the initiative, the head of state said that there are important elements that must be preserved, as well as provisions that need to be revised.

“There are important elements and the tax reform must be carried out, but I think the Government should not rush. It needs to take a pause and carefully analyze the comments,” Maia Sandu said.

The President referred in particular to the discussions on changing the VAT rate for medicines, emphasizing that the Executive currently does not have a mechanism to compensate the population for possible price increases.

“It is true that for medicines the Government cannot currently provide a mechanism to compensate people for this increase. And as long as it does not have this mechanism, there is no point in increasing VAT on medicines,” the head of state said.

According to Maia Sandu, the Ministry of Finance has already announced that this provision will no longer be part of the tax reform and that the reduced VAT rate for medicines will be maintained. The head of state pointed out that other articles of the draft also need to be carefully examined so that the reform is balanced and applicable.

“Of course, on the one hand we want to do things quickly, because we have a lot to do, but on the other hand, this is a serious reform and I believe the Government needs to take more time, to thoroughly analyze all aspects and only then come forward with a final version to be proposed for approval. Today it is not ready,” Maia Sandu concluded.

The tax reform proposed by the Government of the Republic of Moldova for 2027 is currently in the public consultation stage and has generated intense debates, especially regarding the unification of the VAT rate and the impact on sectors such as agriculture, medicines and energy resources. The main proposed measures include:

- reducing personal income tax from 12% to 7% for annual incomes up to one million lei and introducing a 15% rate for incomes exceeding this threshold;

- applying a zero rate for reinvested profits of companies; - standardizing VAT at 20%, eliminating reduced rates and introducing a rapid and automated VAT refund mechanism;

- transforming the personal allowance into a direct monthly payment for families with children;

- expanding the self-employment (freelance) regime and capping certain local taxes.

Several business organizations and representatives of farmers have requested the revision of certain provisions of the draft, in particular those regarding the VAT applied to certain products and services. At the same time, the authorities have announced that the draft remains open to changes following the consultations.