Draft amendments to Title IV of the Tax Code on excise duties will enter into force under the new name “Harmonized Excise Duties” after Moldova’s accession to the EU.
The changes are being undertaken as Moldova is gradually harmonizing its national tax legislation with the European one.
The latest draft of this draft on excise duties has been released for public consultation. Comments and proposals can be sent to the Ministry of Finance until February 23 this year.
Harmonization will be partial
The authors of the document note that the harmonization of excises in Moldova will be partial. Thus, the excises on alcoholic beverages will reach the minimum level established in the EU, except for the excises on apple and pear cider. At the moment they are higher than the minimum ones.
For petroleum products and energy, the rates will also reach the minimum level set in the EU. Except for the excise rate on diesel fuel, which will be lower than the one established in the EU. According to the authors of the document, this is done taking into account the economic and social impact of this rate on an important sector of the economy for Moldova – agriculture.
For tobacco products, the level of excise taxes in Moldova has not yet reached the minimum level. But a tax calendar has been developed, according to which the rates are gradually increased every year, taking into account the economic situation, the purchasing power of the population and such an important factor as smuggling.
In 2027, tobacco rates will reach the minimum limits as planned in the tax calendar.
Excise tax administration will be simplified
In addition, the draft provides for a number of new rules and definitions that will be applied to the administration of excise taxes. In general, it will be simplified, the authors of the document claim.
The document also includes an article on violations arising from the movement of excisable goods. Clarifications are prescribed as to where a company is obliged to pay excise duty in such cases.
The concept of a mechanism for suspending payment of excise duty is introduced. This is a regime applicable to the production, processing, storage, warehousing or movement of excisable goods, whereby excise duty is suspended and is levied at the time the goods are released for consumption, rather than at intermediate stages.
IT systems will reduce bureaucracy and costs for enterprises
An integrated electronic system for movement of excise goods between Member States is also envisaged. This will help reduce bureaucracy and minimize administrative costs for businesses.
Products that are imported under the excise duty suspension regime should be covered by monetary guarantees.
The draft also defines excisable energy products and excise duties on them, as well as specific Combined Nomenclature codes for each category of goods.
Provisions appear in the draft to allow authorities to levy excise duties on products used as fuel even if they are not included in the official list.
Suggestions for improving the draft will be accepted until February 23 this year.
