In 2021, Moldova plans to unify the VAT rate for the supply of agricultural raw materials, fertilizers and plant protection products and set it at 12%.
These changes are provided for in the draft tax policy for 2021. In particular, starting next year, the VAT rate on fertilizers and plant protection products will decrease from 20% to 12%, while the VAT rate on the supply of agricultural products will be increased from 8% to 12%. It should be noted that the VAT of 12% will also be applied to sugar beets that are produced, imported and / or supplied to the territory of Moldova. The first measure is expected to have a positive effect on local agricultural producers (+222 million lei), the second measure - on the state budget (88 million lei). In general, due to the implementation of this measure, the budget will not receive about 134 million lei. As noted in the explanatory note, the current reduced VAT rate (8%) on domestic and import supplies of agricultural products made it possible to make agricultural products more affordable for the population, but in general it did not affect the increase in the competitiveness of domestic agricultural products, which is confirmed by the growth of agricultural imports at a reduced VAT rate. Moreover, the difference in rates for agricultural raw materials and agricultural products produced led to the accumulation of VAT on the accounts of agricultural producers by about 1.8 billion lei. Accordingly, farmers cannot use these funds, and this puts local products in unequal conditions with imported ones. In this regard, it was decided to revise the existing VAT regime applied to primary agricultural products in order to ensure the development and growth of the competitiveness of local producers. Back in February 2020, was created a special working group, which analyzed the situation and possible solutions to support the agricultural industry, including studying international experience. The main idea of the proposed changes is a gradual reduction in the amount of VAT accumulated on the accounts of farmers by converting them into financial resources that they can dispose of.// 02.12.2020 — InfoMarket.
