A Tax Policy for Development, Fairness and Solidarity

The Republic of Moldova needs a tax policy that supports the economy rather than placing a heavier burden on people.

The withdrawal of the draft tax policy following criticism from civil society and the business community gives the Government an opportunity to return with a more balanced reform.

The Civic Movement “Construim Încredere” (“Building Trust”) believes that the new tax policy should not simply be a revised version of the withdrawn draft. A new approach is needed, based on three clear principles: economic development, fairness and solidarity.

We propose:

🔹 moderate taxation of low and middle incomes, with a higher contribution applying only to the portion of personal income that falls within the very high-income bracket;

🔹 an 11% VAT rate across the entire agri-food value chain, from production and processing to retail;

🔹 maintaining reduced tax rates for medicines and products intended for infant and child nutrition;

🔹 tax incentives for profits reinvested in equipment, technologies, digitalisation, production and job creation;

🔹 additional incentives for investments made in rural areas and in regions with limited economic opportunities;

🔹 temporary taxation of windfall profits generated under exceptional economic circumstances;

🔹 a special contribution from the banking sector, provided that its cost is not passed on to customers through higher interest rates and fees;

🔹 targeted social support for low-income families, families with children, vulnerable pensioners and people facing financial hardship.

Before introducing new taxes, the state must demonstrate that it uses the funds already collected efficiently. The Government must reduce unjustified expenditure, eliminate ineffective tax incentives, combat tax evasion and the informal economy, and publicly disclose the real impact of each measure.

For every tax policy change, citizens and businesses must clearly know:

How much do they pay now? How much will they pay after the reform? Why is this difference necessary?

A good tax policy is not one that simply collects more revenue. It is one that distributes the tax burden fairly, encourages investment and protects people for whom every leu matters.

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