On October 5, 2020, the Ministry of Finance of the Republic of Moldova launched the public consultations process for the 2021 fiscal and customs policy measures document. This provided, the Independent Analytical Centre “Expert-Grup” drafted a series of comments and recommendations provided in a comprehensible table format. It is fundamental though that we emphasize three strategic recommendations:
1. The tax regime is amongst the main factors that determines the success of a country’s development. In spite of the fact that, for over ten years now, each year the Government presents different amendments to the tax regime, it still does not fully correspond to the fundamental requirements on facilitating economic growth. In order to change the current situation, the Government must put forward fundamental and precise amendments that would lead to creating a fair, stable and predictable tax system, that is in line with the state model defined in the Constitution. The tax system must be transparent, clear and easy to manage. As well, provided the tax system is one of the key policy that influences the investments (and in consequence, the development), identifying an optimum level of the tax burden on the economic agents is a task that is not contrary to the stated principles and is, in turn, part of this policy. Thus, all the assessments and recommendations on the measures presented in this document are treated in light of how they correspond to the mentioned criteria.
2. The fiscal policy, additionally to its main purpose on ensuring collection of funds to the budget in order to cover budgetary commitments, must also have the role to support the state policy in other fields (economy, social, environment etc.). In this regard, we drafted a series of recommendations that would allow to align the fiscal policy to the objectives on economic growth, processed goods’ exports, regional and local autonomy development, environment protection, diminishing the tax evasion tendencies and regarding consumer protection. In this respect, the recommendations are aimed at the following fiscal policy components: fiscal treatment of bonds issued by local public authorities, reviewing the VAT rate in agriculture, capping local taxes, eliminating the spouse exemptions, standardising income tax, capping cash payments at 100 000 MDL per transactions, combining the environment tax and the excise duties on fuel as one single tax and excluding the payments (taxes) on the emissions of stationary sources and payments (taxes) on pollutant discharges.
3. It is not clear how and based on which impact assessments were certain fiscal policy measures established. We therefore call the authorities to present more robust evidence that would explain the policy measures as well as to present the impact ex-ante analyses of the respective measures on the business environment, the social sphere and the economy, in general.