Although the legislative calendar has been followed much more closely in recent years, the business community was given little time this year to prepare its position.
In this context, as soon as the draft appeared in the media, business representatives were already voicing their disagreement that associations had been given too little time to develop such a position.
A 600-page draft without an impact analysis
The Ministry of Finance, as the draft’s author, organized a series of consultations with the business community, labor unions, representatives of local authorities, and other associations that expressed interest. The Ministry of Finance emphasizes that this is the first round of discussions, preceding the development of a unified position by all business associations.
However, representatives of the business community believe they were given extremely little time to prepare their position and formulate specific proposals on the draft.
“The draft is very long—over 600 pages—and our members have only one week to review it, discuss it within their organizations, and prepare proposals and comments,” ” says Lilia Tsapu, an entrepreneur and representative of the National Confederation of Employers of Moldova. “And when you consider just how radical the Ministry of Finance’s proposals are, it becomes clear that it is difficult to assess, analyze, and—most importantly—quantify their impact. Furthermore, more time is needed to prepare and agree on the organization’s unified position.”
Moreover, the draft has so far been prepared without a detailed impact analysis—complete with figures and specifics—of the proposed changes. The ministry’s experts promise to present such an analysis in the near future.
During the consultations, Minister Andrian Gavrilitsa emphasized that the reform aims to create a simpler, more predictable, and more competitive tax system.
“We want the tax reform to contribute to the creation of a fairer and more incentivizing tax system for economic development through investment,” he said. “Your opinions and expertise are crucial to refining our tax policy initiatives, which we have developed to maintain the economy’s competitiveness, boost investment, create jobs, and ensure the sustainable development of communities.”
Compromise Solutions
According to a statement from the Ministry of Finance, the consultations included a presentation of the main measures envisaged by the draft, including a reduction in the number of taxes and fees, the application of a zero rate to reinvested (undistributed) profits, the introduction of an automatic VAT refund mechanism, the reinstatement of excise tax refunds in agriculture, and the simplification of administrative obligations for taxpayers.
Measures to limit certain local taxes, abolish preferential VAT rates and exemptions that contradict European standards, reducing income tax exemptions, and expanding the tax regime for freelancers, who will be able to engage in any economic activity.
Participants in the consultations appreciated the Ministry of Finance’s openness to dialogue, within the framework of which, as the ministry emphasizes, several compromise solutions were reached.
However, neither business representatives nor ministry experts are yet disclosing what these solutions entail. The business community is refraining from specific assessments and opinions, as formulating them requires time and a comprehensive understanding of the impact of the proposed measures.
The ministry emphasizes that the proposals received during the consultations and submitted to the ministry will be analyzed and taken into account during the final drafting of the bill.
