Photo: Moldpres
Here, the key measure is a significant increase in the personal tax deduction—the amount of income that is exempt from income tax. According to the government’s proposal, the personal exemption will be increased by nearly 35%—from 29,700 lei to 40,000 lei per year. Thus, the government is effectively expanding the portion of citizens’ income that is exempt from taxation by an additional 10,300 lei annually.
The Cabinet of Ministers explains this measure as necessary to adapt the tax system to changes in the cost of living and the decline in the population’s purchasing power. The current personal exemption amount has gradually ceased to fulfill its primary function—ensuring a minimum level of tax protection for individuals.
“In conjunction with the increase in the minimum wage, which will be announced and take effect on January 1, this measure will allow us to further reduce informal payments—situations where employees are officially paid the minimum wage, while the remainder of their salary is paid under the table,” the prime minister stated.
In practical terms, this should lead to an increase in take-home pay, especially for low- and middle-income workers.
Thus, the government has chosen to support the population not through direct payments, but by reducing the tax burden. This approach simultaneously stimulates formal employment, as legal work becomes more attractive due to the increase in take-home pay.
This is precisely why increasing the personal tax deduction is one of the main tools for achieving the government’s goal of raising the employment rate from 57% to 62% by 2029 and integrating at least 100,000 people into the labor market. At the same time, the goal of bringing 100,000 people into the labor market has already been included in previous government programs. In particular, it was announced last year by Natalya Plugaru, then Minister of Labor and Social Protection.
In addition to the low personal exemption, the current system contains exceptions that complicate administration and create disparities among categories of taxpayers. The government proposes to amend a number of tax rules governing other types of personal income. In particular, it plans to revise taxes on investment income.
Starting January 1, 2027, it is proposed to change the taxation regime for capital gains: the capital gains tax will apply to the entire amount of taxable income, rather than just to the 50% excess, as is currently the case. It is also proposed to increase the tax on dividends from 6% to 8%, and the tax on monetary donations from economic entities to individuals from 6% to 12%.
The government’s rationale is simple: different types of income should be taxed more uniformly. Currently, according to the Ministry of Finance, the differences in tax rates create difficulties for tax administration and opportunities for tax optimization.
Thus, the reform is based on the principle of redistributing the tax burden: for labor income, the proposal is to strengthen tax protection, while for certain types of capital income, the contribution to the budget is to be increased.
It is precisely the change in the taxation of investment income that has become the most controversial part of the reform.
Business representatives note that raising the capital gains tax could reduce the attractiveness of investments for individuals. Fagura CEO Tudor Darie believes that this measure may contradict the government’s stated goal of stimulating investment.
“Overall, this is a sound fiscal policy that should be viewed positively. However, in my opinion, the issue of raising the capital gains tax requires reconsideration. I admit that I expected the tax rate for the diaspora (12%) to be lowered to the level applicable to residents (6%). Now they have effectively ‘equalized’ them, but did so by raising the rate,” notes Darie.
However, from the authorities’ perspective, the change in tax rates is part of a broader effort to make the tax system more equitable and reduce the disparity between different sources of income.
MP Marcel Spatar notes that the initial version of the tax reform was more radical, but it was revised following consultations with the public and the business community.
“Tax policy for 2027 is an extremely complex task, but at the same time a necessary step to secure the resources needed to raise salaries in the public sector: in education, healthcare, public order, local government, and other areas. Minister Andrian Gavrilita’s initial goal was to bring the structural problems of our tax system to the forefront of public discussion and resolve them within 2–3 years. “However, since the proposed approach proved to be too radical, a revision was necessary, along with a shift toward a more balanced and moderate strategy,” the lawmaker notes.
The reform represents an attempt to shift the balance of the tax system: less pressure on labor income and more focus on income not directly linked to employment.
“And if we want a state that can pay pensions and salaries, build roads, support schools and hospitals, and ensure security, we need a simpler, fairer, and less susceptible-to-evasion tax system,” concluded Prime Minister Vasile Tofan.
Further discussions with the business community, labor unions, and the public will determine how successfully this balance can be achieved.
At the same time, the 2027 Tax Policy includes a number of other changes that go beyond personal income taxation. These include measures to stimulate investment, a review of approaches to taxing certain types of activities and goods—including so-called “harmful habits”—as well as other initiatives to improve the tax system. Logos Press has already reported on some of these changes and will continue to provide updates in future articles.
