It is noteworthy that the reform is planned to be funded not through new loans, but by scrapping the 1.8 billion-pound digital ID project for workers. The previous government had proposed introducing such documents to combat illegal immigration, but the initiative drew widespread criticism, and a parliamentary committee called it a “fiasco,” according to Bild.
The decision was made against the backdrop of high electricity costs for British households. The average annual household bill currently stands at about 1,862 pounds, or approximately 44,000 lei.
“We are immediately cutting taxes on energy costs, leaving people with more money, and restoring their hope,” Bernam said.
At the same time, financial markets have reacted to the new prime minister’s plans with caution. Investors fear that the additional support measures promised to them will lead to an increase in government spending.
And what about Moldova?
The standard VAT rate on electricity in Moldova is 20%, but a 0% exemption currently applies to residential consumers (the general public)—in effect, electricity is exempt from this tax. For legal entities (businesses), the tax is applied at the standard rate of 20%.
In addition, an 8% VAT rate on natural gas has been set for residential consumers. This rate applies to both imports and domestic supplies.
Opposition factions (in particular, “Our Party”) have proposed, due to the severe energy crisis Moldova is experiencing, to eliminate VAT on gas for the population in order to reduce bills by approximately 8% (more than 1 leu per cubic meter).
Instead, the government is considering an initiative to set a uniform VAT rate of 20% on all energy resources (gas, electricity, and heat).
Specifically, the Ministry of Finance has put forward a draft of a large-scale reform that would raise the preferential 8% VAT rate on gas to the standard 20%. This has drawn criticism from experts and civil society, as it could lead to rising costs and further impoverishment of the population and economic entities.
