To Alexandru Bădăru
Increase in VAT on agricultural products from 8% to 20%
According to Alexandru Bădăru, the structural problem with this change is as follows. Moldovan farmers sell their produce—especially grains and oilseeds—on deferred payment terms, typically ranging from 60 to 180 days. Traders and many processors impose these terms as “standard market practice if the farmer wants to get a higher purchase price.”
Thus, a farmer selling, for example, wheat in August will receive payment in October or November. However, the VAT included in the invoice is due immediately, regardless of whether the money has actually been received or not. In a sector with extremely limited access to bank credit, “this is not merely an inconvenience, but a full-blown, fiscally driven liquidity crisis.”
The increase in VAT from 8% to 20% on agricultural products—especially grains and oilseeds intended for export—significantly increases the financial risks associated with fraudulent “VAT carousel” schemes.
“This type of fraud is well documented: fictitious intermediary companies accumulate VAT on products, fail to remit it to the budget, and disappear. At a 20% rate (instead of the current 8% rate), the scheme becomes proportionally more profitable,” the expert believes.
Another extremely harsh potential decision by the Moldovan authorities is that the right to a VAT refund would apply only to transactions registered as of January 1, 2027. VAT accrued in dealings with the state prior to that date will not be refunded. (It should be noted in parentheses that the VAT amounts accumulated to date in the accounts of agricultural enterprises are in the billions of lei.)
“This is tantamount to the state unilaterally waiving its tax obligations to taxpayers—a measure that raises serious constitutional questions regarding property rights and the certainty of legal relations,” asserts Alexandru Bădăru.
Increasing VAT to 20% on fixed assets and agricultural resources
The Ministry of Finance’s proposal to raise the VAT rate from zero to 20% on agricultural machinery, buildings, land, electricity, heat, natural gas, and hail protection systems will directly impact investment opportunities in Moldova’s agri-food sector.
“Any tractor purchased after January 1, 2027, will cost 20% more,” an expert notes in this regard. “Energy used in agricultural production—whether for irrigation, fruit storage, or grain drying—will be subject to a 20% VAT rate and will become one-fifth more expensive. Hail protection rockets are a special case—they represent a systemic crop protection measure in a country that regularly suffers from extreme weather events. The introduction of a “20% VAT on hail protection” is, in essence, a decision that places fiscal pressure specifically on the tools used to enhance the climate resilience of agriculture.”
Increase in the “social package” to 21%
The increase in social contributions from 18% to 21% for full-time agricultural workers adds 3 percentage points to wage costs in a sector with low profitability.
“From a public policy perspective, the introduction of a 21% contribution rate for day laborers (from effectively zero) directly contradicts efforts to formalize the employment of this category of agricultural workers through the implementation of the e-Zilier platform. Employers and workers will most likely revert to verbal agreements and cash payments. This is precisely the practice that the e-Zilier platform was supposed to eliminate,” the expert believes.
As a reminder, during the presentation of the e-Zilier platform, the heads of the Ministry of Agriculture and the Ministry of Labor noted that “the existence of this platform does not change the existing legal framework in the areas of labor and social protection, but merely improves monitoring and record-keeping.”
Land Tax Based on Cadastral Value
The transition from the current formula for calculating land tax to a rate of 0.1%–1.0% of the cadastral value, as set by local authorities, “raises two main problems,” according to Alexandru Bădăreau.
First, there is unpredictability: farmers cannot plan for long-term (at least for one major crop rotation cycle) administrative (fiscal) costs associated with land in the medium term if the rate is set annually—with permissible fluctuations in its amount by several times.
Second, there is potential for a significant increase in costs. It is clear that the updated cadastral value of agricultural land in Moldova could lead to a substantial increase in land taxes compared to the current formula. This will significantly increase costs for farmers and reduce the competitiveness and liquidity of their businesses.
Excise Tax on Diesel Fuel
The proposed package of fiscal changes provides for a gradual increase in the excise tax on diesel fuel: from 3,978.95 lei/t in 2026 to 4,774.7 lei/t (2027), 5,729.7 lei/t (2028), and 6,875.6 lei/t (2029). In total, this represents a cumulative increase of 73% over the entire period.
At the same time, compensation is provided only for field agricultural work and is only partial (maximum compensation is 90%). Furthermore, livestock farming—which is already under pressure due to the cost of feed—is excluded from the list of beneficiaries.
A double-digit percentage increase in the excise tax on diesel fuel, applied to a sector where mechanization is the main factor in productivity, represents a significant burden that will directly affect production costs and, indirectly, on the competitiveness of Moldovan agricultural exports.
Elimination of Tax Exemptions
The elimination of tax exemptions for enterprises established by associations of the blind, the deaf, and other people with special needs, as well as for trade unions and patronage organizations, raises questions about the social impact of the package of fiscal measures beyond the agricultural sector.
Social enterprises operate with extremely low profit margins—taxing them will directly affect jobs for the most vulnerable segments of the population.
Context and Conclusions
The fiscal reform for 2027 proposed by the Ministry of Finance has an internal budgetary logic—the goal is to cover the budget deficit and increase government revenue amid a decline in the availability of favorable financial alternatives.
If this reform is implemented without an in-depth analysis of its consequences, sector-specific differentiation, and mechanisms to protect vulnerable sectors of the economy and society as a whole, it risks exacerbating structural imbalances and overall decline.
This is all the more true given that, according to NBS data published in April 2026, the Republic of Moldova has lost 41.5% of its active agricultural workforce over the past three years—from 185.3 thousand people in 2023 to 108.4 thousand in 2025. The absolute poverty rate in rural areas has reached 42.9%.
The agricultural sector has endured five years of severe drought, the cumulative production losses from which have depleted the working capital of most farmers.
Moldova’s rural economy is unable to simultaneously absorb increases in VAT, social benefits, and the excise tax on diesel fuel, and land tax—“especially under current conditions of recurring droughts, limited access to credit, and accelerated rural depopulation,” concludes Alexandru Bădăreau.
