Alexander Flenkya
The authorities claim that this is a step towards narrowing the gap between the regions, while on the left bank they urge not to do so in order to prevent a “humanitarian catastrophe”. Former Deputy Prime Minister for Reintegration Aleksandr Flenkya believes that the law was passed expectantly, but many aspects of its implementation are still not completely clear.
Chisinau emphasizes that the draft was discussed extensively, including at parliamentary hearings to which representatives of Transnistrian enterprises were invited. Indeed, on April 3, the Commission for Economy, Budget and Finance held hearings with the participation of representatives of four companies – Moldavcabel, Intercentr Lux SRL and ARS AUTO-TRANS SRL, who expressed their hope to reach an understanding.
At the same time, the Supreme Council of the unrecognized DMR adopted an appeal to the Moldovan parliament, expressing concern over the proposed measures to introduce tax and administrative payments for the region’s enterprises. The appeal states that such measures may lead to price increases, higher inflation, disruption of production processes and deterioration of the socio-economic situation, as well as provoke humanitarian risks in the region.
Expert opinion
Logos Press asked the former Deputy Prime Minister for Reintegration, Alexandru Flenca, to express his vision of the situation: whether Chisinau will go all the way in this matter and what the implementation of the reform might lead to. The expert believes that the adoption of the law was expected, but its practical implementation raises a number of questions. The logic of the phased introduction of taxes looks reasonable, but the legal details are not completely clear.
“The law was passed, we are waiting for promulgation by the president. I don’t think anyone has any doubts that it will be promulgated, it will come into force, the law must be implemented, and it will be implemented. And then there are many questions, to which I do not have answers at the moment, for the simple reason that the amendments to the tax legislation, which were adopted today in the second and final reading, have not been published. So we have to go by the scant information that appeared in the press and what was stated by the rapporteur on the draft. From what I see, the changes boil down to the fact that already this summer VAT will be imposed on such excisable goods as tobacco products and alcohol. This order of taxation is logical: we should start with excisable goods, which are the main source of smuggling. However, questions arise in the part that the order and timing of the introduction of taxation of excisable goods are transferred to the government,” said Alexander Flenkya.
He considers this, on the one hand, understandable from the point of view of flexibility in negotiations, but on the other hand, we are talking about indirect taxes, which usually have to be strictly defined by law. And here, of course, there are transparency issues and risks, which have already been pointed out by the National Anti-Corruption Center.
Corruption risks
“Still we are talking about taxation, indirect taxes – this is a very subtle thing, and all this is strictly regulated exclusively by law. Let’s not forget that exemption, let’s say, from VAT on each separately delivered ambulance as humanitarian aid – there are such precedents. Each time the exemption of even one small delivery is passed through the parliament. In this case, the government gets leverage to decide what taxes to levy, what not to levy, when to levy them and from which companies. This, of course, creates serious corruption risks, which was mentioned by the National Anti-Corruption Center in its conclusion on anti-corruption expertise even before the first reading. And from this point of view, I fully share these concerns. Therefore, I repeat, there are a lot of reservations, and final conclusions can be drawn only after the publication of the text of the law,” the former deputy prime minister for reintegration said.
In August, the Convergence Fund should start working. So far, it does not look finalized. This was recognized and Radu Marian in Parliament, saying that more clear mechanisms will become. when the fund will work.
“Here, too, it will be a question of the government disposing of budget money at its own discretion. And this was also in the conclusion of the National Anti-Corruption Center, because taxation, who to exempt from taxes, who not and how, how to dispose of this money – all this is regulated by law, that is, the law on the budget, the Tax Code, the Customs Code and so on. Therefore, yes, there are questions, and it will be possible to answer them unambiguously only after the publication of the law”.
At the same time, the expert admits that the logic of the reform is generally justified:
“Of course, there are questions related to how it will all be realized. But the plan as such is correct, these measures are long overdue. But again, it is complicated. It is difficult for me to imagine how all these mechanisms will be worked out by August 1. But I will be glad to be pleasantly surprised.
