Adrian Lupuszor
Adrian Lupushor, executive director of Expert Grup, an independent think tank, made detailed arguments for such a policy, publishing an article on the need for large-scale fiscal consolidation.
“Broadening the tax base, reducing the VAT deficit (estimated by the IMF at 25-30% of the tax collection potential), gradual formalization of the informal economy and modernization of the State Tax Service are measures capable of generating between 2 and 4 percentage points of GDP of additional revenues over four to five years, according to estimates by external partners,” the article states.
A comparative analysis shows, according to the author, that the fiscal adjustment needed to bring the deficit to a sustainable level (2-3% of GDP in the medium term) should be mainly aimed at increasing revenues. While public spending in Moldova is below the regional average, tax revenues as a percentage of GDP are even lower in relative terms. On average for 2020-2025, the share of public revenues in Moldova’s GDP was only 33.2%, compared to 35.2% in Bulgaria, 36.4% in Lithuania or 40.8% in Bosnia and Herzegovina, the expert notes.
