Moldova Dairy Association Calls for 8% VAT on Kefir and Sour Cream

The ‘Lapte’ Association: kefir and sour cream should be subject to 8 per cent VAT

The ‘Lapte’ Association of Milk and Dairy Product Producers is asking the Moldovan authorities to expand the list of goods to which the draft law on the simplification of fiscal legislation provides for the application of an 8 per cent VAT rate by a few more product items.

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Overall, operators in the dairy sector have few complaints about the drafters of the VAT reform. The drafters of the bill have included in the list of goods subject to 8 per cent VAT many of the products that previously fell into the ‘social’ category, with a regulated retail mark-up and a reduced VAT rate – drinking milk, butter, quark and soft cheeses (brynza, kash, etc.). However, for some inexplicable reason, two important categories of dairy products were omitted from this list.

The first is fermented milk products: kefir, sour cream, yoghurt, etc. According to ‘Lapte’, these are mass-market products consumed frequently, mainly falling within the lower-priced segment of the product range, yet of great social significance. This is because they are often one of the most important sources of animal protein for low-income consumers, and also play a major role in children’s diets. According to industry experts’ calculations, an increase in VAT on these dairy products from 8 per cent to 20 per cent will raise factory prices; for example, the price of the most popular sour cream (15–20 per cent fat content) will rise by 3–5 lei per standard pack.

Furthermore, fermented products form the basis of the range of dairy products for state food procurement intended to supply social institutions and the armed forces. In other words, an increase in VAT on these goods will lead to a rise in the state’s expenditure for these purposes.

The second product category not included in the reduced VAT rate is whey. This is an important raw material – one that is scarcely produced in Moldova – used in the manufacture of protein products, food creams and the like.

In principle, industry operators would like to include certain types of hard cheese in the list of dairy products subject to 8 per cent VAT, with a view to reviving their production at some dairy factories in the north of the country. However, they realise that the chances of securing a reduction in VAT on these products – which are currently subject to a 20 per cent VAT rate – are negligible.

This story was translated with the assistance of artificial intelligence.The translation was also reviewed by the Logos Press editorial team.

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