The farmers consider the VAT of 20% in agriculture should not be kept and hope the fact that it is stipulated in the draft budgetary-fiscal policy for next year is only a technical mistake. “It would be unreasonable to follow the same wrong path,” Raisa Bejan, head of the Executive Division of the Union of Sugar Producers of Moldova, has told IPN.
Until January 1, 2013, the VAT in agriculture was 8%. Afterward, it was raised to 20%. After a wave of complaints from farmers in April, the authorities decided to refund them the difference of 12%.
According to Raisa Bejan, the rise in VAT on the production of sugar led to price increases. The sugar became a contraband good, smuggled mainly from Ukraine. As a result, the state budget revenues decreased. “In the first quarter of 2013 alone, there were smuggled 14,000 tonnes of sugar to the value of over 130 million lei. No money was transferred to the budget from this sum,” she said.
There was a shortage of sugar in Moldova in 2012. It was to be removed by importing sugar. But, most of it was smuggled and no VAT and customs duties were paid. The damage caused to the state budget came to over 16 million lei. The Moldovan sugar producers do not cope with the disloyal competition from the Ukrainian sugar importers and have to give up, stated Raisa Bejan.
According to her, the import of oil products is another problem. The farmers are for liberalizing it. “The oil prices are very high. Conditions should be created for the agricultural producers to be able to import oil products by themselves, from Romania for example. It would be more convenient and cheaper,” she said.
Raisa Bejan added that the penalties also represent a constraint to the business sector of Moldova. The employers suggest that they should be proportional to the damage caused to the budget as there are young specialists with a short length of service, who make mistake either mechanically or because they lack experience, while the imposed penalties are too harsh.
On November 12, the National Employers Confederation will stage a forum of Moldovan businesspeople where it will present the main constraints faced by them and policies for removing them.
