The law that provides for the exemption of the IT companies from paying the VAT and the customs taxes on the import of computation equipment and institutes a common tax of 7%, which was recently passed by Parliament in the first reading, can take effect on January 1, 2016, Minister of Information and Communication Technology Pavel Filip said in an interview for Radio Free Europe. He voiced hope that the law will be adopted in the second reading in September, IPN reports.

The minister said that when this bill was drafted, a complex analysis was carried out in concert with the development partners. When a common tax is applied, the companies do not need accounting departments and the rules of the game are very clear and simple. “They do not need to pay salaries ‘in envelope’ and to hide the profit as only one tax is paid,” he stated.

Pavel Filip noted that the goal is not to reduce the taxes paid by an IT company, even if this is also an important thing. “But corruption, bureaucracy and the heavy tax administration process are the biggest problems. By introducing a common tax, we eliminate these constraints. The rules are transparent and clear. For example, if I sold goods for 100 million lei, I pay 7 million lei to the state and then I do what I want with the rest of the money,” he stated.

The minister explained that according to a study by PricewaterhouseCoopers, a Moldovan IT company needs 181 hours to administer the taxes and has to make 31 payments in the form of taxes. “Time is spent for calculating and paying these taxes, but the biggest problem is the fact that any inspector can interpret the law because any law can be regretfully interpreted,” he stated, adding that there will be no place for interpretation when a common tax is instituted.