The value added tax (VAT) is a general tax by which the state collects into the budget 20% of the value of the goods supplied and services provided on Moldova’s territory. Lower tax rates are imposed on some of the products, such as food products, the VAT on which is 8%. The expert in economic policies of the Institute for Development and Social Initiative “Viitorul” Veaceslav Ioniță has told IPN that apparently the tax is collected from companies, but it is actually paid by consumers. Unlike the other taxes, the people pay VAT every time they buy a product or pay a service, this tax being included in the final price. Annually, each family pays about 20,000 lei VAT on average.
According to the expert, the sum calculated into the state budget from VAT is of about 20 billion lei a year. For comparison, the tax on real estate brings 300 million lei to the budget, while the tax on farmland – 200 million lei. Even if the tax on dwellings or that on land in figures represent much lower sums than the VAT, the citizens feel the first taxes more as they pay them directly.
Veaceslav Ioniță said the system for paying VAT has a number of shortcomings. Some of the business entities resort to stratagems to avoid paying the VAT. They declare a lower value when they sell property or a service than the real price. Also, a transaction is not declared and a sales slip is not issued and the company, together with the buyer, this way excludes the state from this transaction.
The differentiated tax rates on agricultural products, depending on the status of the producer, is another problem. If the agricultural products come from a peasant farmstead, no VAT is imposed. If these products come from a limited liability company, a VAT tax of 20% is levied.
Veaceslav Ioniță noted that the state does not have a mechanism for refunding the VAT when a product sold for several times is overtaxed. Currently, the companies overpaid hundreds of millions of lei VAT and cannot get back this money.
The expert considers VAT instead of import duties should be imposed on the import of motor vehicles. The current taxation system, depending on the cylindrical capacity, is unjust and advantages only the rich people. “For example, on the import of a car worth €3,000 whose engine has a capacity of 1,500 cm 3, an import duty of about €2,500 is collected. The same duty is levied in the case of a car worth € 20,000 and a similar capacity of the engine. If VAT is imposed and the import duty is excluded, the paid tax will be five times lower in the case of the car worth €3,000,” stated Veaceslav Ioniță.
