The Parliament of Moldova approved in the second reading the draft fiscal policy for 2024.
As Minister of Finance Veronica Sireteanu noted earlier, the objectives of fiscal policy are to create a coherent, fair, efficient and simple tax system that ensures the mobilization of budgetary resources needed to finance sustainable development tasks. The bill provides for tax instruments to attract and retain skilled labor; revision of the mechanisms for calculating and paying taxes and fees in order to simplify and clarify the legal framework, prerequisites for counteracting “envelope salaries”, measures to improve tax administration, etc. At the same time, other budget policy measures are aimed at clarifying the existing ambiguous situations in the budget and tax legislation and bringing greater clarity to its understanding and application. Also, the draft law is aimed at continuing the process of harmonization of national legislation with the legislation of the European Union, as a matter of priority, in terms of VAT and excises. Among the proposed concrete measures is the expansion of the range of tax benefits and the revision of the categories of employer's expenses in favor of employees that are allowed to be deductible for tax purposes. This will allow retaining a skilled workforce, attracting new specialists, and diversifying the social package offered to employees. The draft fiscal policy for 2024 proposes to expand the categories of deductions for individuals when establishing income tax liabilities with expenses related to insurance premiums for facultative health insurance or under a contract for the provision of medical services, expenses associated with contributions based on a life insurance contract. Individuals will also be able to deduct mortgage-related interest payments up to the average salary in the economy. The document also provides for the unification of tax rates on personal income withheld on investment and financial income, setting them at 6%. The purpose of this measure is to stimulate the investment of savings accumulated by individuals by applying a single treatment to all specified income. The draft fiscal policy for 2024 provides for maintaining the rule for setting excise rates for a period of 3 years to ensure the achievement of the principle of predictability for the business environment, as well as for a clear forecast of budget revenues. An annual increase in excises on excisable goods is envisaged. In order to fulfill obligations to harmonize fiscal and customs legislation, the tax regime applicable to cars is being changed by imposing VAT on a general basis, starting from January 1, 2026, with a gradual reduction in the excise duty rate. As previously reported, as part of the second reading of the draft fiscal policy for 2024, the deputies initiated 20 amendments that contain 102 proposals, of which the government supported 33 amendments, six were partially supported, and 63 were not supported. In particular, the government supported the initiative to set the standard VAT rate for HoReCa enterprises at 8% (instead of 12%); agreed with the annual indexation of excises on tobacco and similar products by 10%, and not by 7%, as previously envisaged; supported the introduction into the tax legislation of a tax regime for economic agents involved in the management of ferrous and non-ferrous metals waste, with the application of a 7% income tax rate for companies in this area.The initiative to apply diversified income tax rates for residents of free economic zones was partially supported, depending on the export destinations and the volume of investments. The initiative to reduce from 7% to 6% the income tax rate withheld by banks and savings and loan associations from the income of resident individuals, as well as issuers of corporate securities, was not supported. The Ministry of Finance did not support the proposal to return two mandatory payment terms and a discount when making the full amount of property tax before the end of June. It also spoke out against the inclusion of the fee for postal terminals in the system of local taxes and fees, as this initiative requires additional analysis. At the same time, the government partially supported an amendment to the Tax Code to establish a reduced 8% VAT rate on hygiene products for women, suggesting that this change be applied from January 1, 2025. Currently, these products are subject to VAT at a rate of 20%. Support was given to the proposal to change the deadlines for the obligatory application of an excise stamp on tobacco products and the authorization of the sale of tobacco products from the date of their production. Herewith, the idea of postponing the introduction of fines for smoking in common areas of residential buildings and dormitories, on the balconies of residential buildings was not supported, since the initiative does not concern fiscal policy. In a more detailed interpretation, the Tax Code will present the concept of capital gain or loss and the rules for its recognition. The government's conclusion was taken into account when considering the draft fiscal policy for 2024 in the second reading. The final version of the document adopted by the parliament has not yet been made public.//20.07.2023 – InfoMarket.
