Moldova May Drop Proposed Income Tax on Unions and Employers

The government could abandon the ‘innovative’ idea of taxing trade unions and employers’ organisations

The government is prepared to reconsider the provision in the draft budgetary and fiscal policy that removes the income tax exemption for employers’ and trade union organisations. The State Secretary at the Ministry of Finance, Corina Alexa, stated that there is scope for further discussions with a view to finding a solution.

Corina Alexa

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“This measure forms part of the package of objectives aimed at streamlining tax regimes. We have discussed this within the framework of the Ministry of Labour and Social Protection. We agreed that their arguments were very sound and that there is scope for further discussion to find a solution to this issue,” said Corina Alexa.

According to the arguments put forward by the National Confederation of Trade Unions of the Republic of Moldova and the National Confederation of Employers of the Republic of Moldova, these associations should not be taxed, as they do not carry out any economic activity.

“It would also be a very innovative practice”

The Chair of the Committee on Economy, Budget and Finance, Marcel Spatari, argued that the arguments put forward by the employers’ representatives are valid and that the impact of the measure requires further analysis.

“As a former Minister of Labour and Social Protection, I understand your arguments and find them valid. We will carry out further checks to see what savings will result from this repeal or why it is being requested. … Trade unions and employers’ organisations can set up business entities, and these must pay income tax, but the work of defending employees’ rights and representing employers’ interests is a non-profit activity. We must also analyse the experience of other countries, but I do not know of any European country that taxes trade unions. That would, I believe, be a highly innovative practice”, said Spatari.

We would point out that, a few days ago, in a joint submission addressed to the Speaker of Parliament, Igor Grosu, and the Committee on Economy, Budget and Finance, the presidents of the CNSM and CNPM, Igor Zubcu and Ana Groza, called for the current tax regime to be maintained. The confederations point out that trade unions and employers’ organisations are non-commercial organisations, and their income comes mainly from membership fees and contributions. According to them, these funds are used for activities involving the representation, consultation and defence of members’ interests and are not intended for distribution as profit.

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