Parliament approved draft legislative amendments on fiscal measures agreed upon with the IMF.

Parliament approved draft legislative amendments on fiscal measures agreed upon with the IMF.

The legislative initiative of the government was adopted by a majority of the deputies in two readings at once. According to the bill, environmental pollution charges will increase by 20% from 2020; from food stamps provided by employers as non-monetary motivation of employees, social insurance contributions will be withheld (18% from the employer and 6% from the employee); VAT rate in HoReCa sector will be increased from 10% to 20%. The bill provides that persons with an annual income of more than 360 thousand lei will be deprived of the right to personal exemption from income tax, which amounts to 24 thousand lei. It is proposed to apply basic taxation for capital gains: 100% for legal entities and 50% for individuals; the amount of withholding income tax at the source of payment will increase from 7% to 12%. From the Tax Code will be excluded provisions, allowing to reduce the taxable income by 500 thousand lei when assessing income by indirect methods, the ban on tax audits carried out with respect to economic agents for the period until January 1, 2018 will be lifted. Individuals receiving international mail products worth more than 200 euros from legal entities (B2C) will pay VAT, customs duties and excises. At the same time, the current limits for the remaining categories and methods of importing goods will remain unchanged: the non-taxable limit for individuals importing goods will be 300 euros for land transport or 430 euros for air and sea transport. Speaking to parliamentarians, Finance Minister Natalia Gavrilita noted that making amendments and additions to tax and customs legislation is one of the conditions for resuming a program of cooperation with the IMF. She noted that the main goal of the bill is to close the “hole” in the state budget that arose as a result of pre-election measures taken in 2018 by previous authorities, to preserve all planned social expenses and investments, and also to resume financing of external partners. During the discussions, some deputies declared unprofessionalism in the preparation of the document and demanded a deeper analysis of the impact of the proposed measures. After the bill was approved in the first reading, it was proposed to consider it in the framework of the autumn session of the parliament, but the parliament adopted the document in the second reading with the votes of 55 deputies. Recall that the Moldovan authorities expect to receive in 2019 the next tranche of the loan from the IMF in the amount of $ 46.5 million, subject to the implementation of preliminary measures agreed with the fund. Such an agreement was reached in early July, based on the results of the IMF assessment mission. Then, at the expert level, an agreement was reached on the results of the 4th and 5th reviews of the 3-year economic reform program supported by the IMF. This agreement should be approved by the IMF management and Executive Board. Consideration by the Executive Council may take place in September, subject to the implementation of the agreed preliminary measures by the authorities to ensure the sustainability of public finances, increase tax discipline and restore the banking sector. // 16.08.2019 — InfoMarket.

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