Cabinet rejects extension of income tax exemption
As previously reported logos-press.md, today this benefit cannot be applied when an enterprise corrects its tax declaration. As emphasized by the authors of the initiative, headed by former Finance Minister Victoria Belous, the provisions of Article 87, paragraph (11) of the Tax Code, providing for deferral of profit tax payment, is an effective measure to support companies to ensure the growth of investment in business. And the existing limitation should not be a reason to deprive a taxpayer of the opportunity to use it.
The government’s response notes that the proposal “would require changes to the information system of the State Tax Service to ensure correct accounting of taxpayers, the timing of declaration and payment of tax, as well as the calculation of penalties/fines for late payment in such cases.
May be interpreted as preferential treatment
In addition, it may affect the sustainability of the fiscal system. The Cabinet of Ministers notes that the deadline for filing returns and paying income tax expires on March 25. The enactment of the new provisions may provoke many questions.
In general, the retroactive application of the TC provisions leads to different treatment of taxpayers who have paid their tax liabilities by the due date. This may be interpreted by them as granting preferential treatment, which contradicts the principles of tax fairness and uniform application of legislation.
And possible cancellation or recalculation of tax liabilities already paid may adversely affect budget execution and create a precedent that encourages non-compliance with tax legislation.
It should be noted that the above-mentioned draft was approved in the first reading during the parliamentary session held on March 12.
