ECO-BUS WEEKLY DIGEST November 30-December 6. Most important Economy & Business news by IPN
● MONDAY, November 30
CALM invites business community to discuss capping of local taxes
The local public authorities are not the enemies of the business community, but are its most reliable partners, said the executive director of the Congress of Local Authorities of Moldova (CALM) Viorel Furdui. He called on the business community not to yield to the provocations of persons who pursue narrow goals and said that the CALM is ready to sit at a roundtable meeting together with the business community so as to identify solutions to all the problems. According to him, the Government’s initiative to cap local taxes is an attempt to undermine the relationship between the LPAs and the business community. The CALM called on the Government and the Ministry of Finance to stop the actions that affect the relations between the local authorities and the business community. Viorel Furdui noted that the capping of taxes is not supported by national agro-industrial associations either. He made reference to a message sent to the Congress by a number of agro-industrial entities, which says that they do not support the 2021 budgetary-fiscal policy.
Economic decline will be of 7%, ex-minister
Ex-minister of finance Natalia Gavrilița said that Moldova’s economy will regrettably have to pay for the mistaken socioeconomic policies pursued by the authorities in the context of the pandemic crisis and it is already anticipated that the economic decline will be of 7%, even if the recession next March could be of 3-4%. Polls among the entrepreneurs show that one third of them, especially the small entrepreneurs, are concerned that they could go bankrupt in the spring of 2021, when they have the accounting records. The issue was developed in a public debate staged by the Institute for Strategic Initiatives in partnerships with the Konrad Adenauer Foundation in Moldova. According to Natalia Gavrilița, the government chose to adopt policies that would advantage large companies. It was hard to access the instituted facilities. The money offered in the private sector were only 8% absorbed. The situation is very difficult. It is expected that problems will be encountered with employment and jobs and the people will continue to see the migration as a solution for remaining afloat.
● TUESDAY, December 1
Cabinet approves 2021 draft state budget law
The Cabinet agreed the 2021 draft state budget law that is based on an economic growth of 4.7%, a 12.6% rise in exports and a 14.3% increase in imports. According to the authorities, the document was drafted taking into account the unprecedented impact of COVID-19 and of the natural calamities of 2020 on the national economy. Deputy Prime Minister Sergey Pușcuța said 2021 is expected to be a year of the recovery of losses sustained in 2020. The state budget comes to 41.4 billion lei, an increase of 4.2 billion lei on the 2020 state budget. The rise in incomes will stem from the higher amounts collected as taxes and from the incoming grants. The state budget expenditure is of 55.4 billion lei, an increase of 4.1% on the state budget approved in 2020. Of the total expenditure, 53% represents the transfers to other budgets, while 47% – the costs of program implementation in 2021, directly through the central public authorities.
2021 budgetary-fiscal and customs policy agreed
The draft budgetary-fiscal and customs policy for 2021 was approved by the Cabinet. The document standardizes the income tax rates and increases personal exemptions for private individuals, especially for maintained persons by 50%. The authorities said the draft contains measures to diminish fiscal pressure and new subsidization mechanisms for supporting economic recovery. The draft budgetary-fiscal and customs policy for 2021 allows for the diminution of the income tax rate from 18% to 12% for persons who work in the justice sector and for the extension of the time limit for applying for tax concessions for the IT sector. The VAT Refund Program will be extended until September 30, 2021 for agricultural producers affected by the natural calamities within the limit of the paid salary taxes. The excise duties were agreed for 2021 – 2023 and the annual rise for tobacco products was set at 15%, for alcoholic drinks at 5%, while for oil products at 9%.
A number of allowances and social benefits to be raised in 2021
The one-off childcare allowance next year will rise from 8,299 lei to 9,459 lei. The provision is contained in the 2021 draft state social insurance budget approved by the Cabinet. The monthly child benefit will also be raised. As of January 1, 2021, the monthly child benefit in the case of socially uninsured persons with children younger than two will be raised by 100 lei, while the monthly child support benefit paid until the child’s age of three and to parents with twins and more children born at once will be increased by 50 lei. Also, the minimum benefit paid up to the child’s age of three in the case of socially insured persons will be raised also by 100 lei. In 2021, all the social allowances will be higher.
Daniel Ioniță: Iasi-Ungheni-Chisinau gas pipeline is luxury of energy security
Romania’s Ambassador to Moldova Daniel Ioniță said the Iasi – Ungheni – Chisinau gas pipeline that was completed this summer is a strategic facility for the country’s energy security. Now that Moldova has such a pipeline, it can hold a different type of negotiations with the key natural gas supplier. “It is not my role to go into details about the technical functionality or economic-financial efficiency of this pipeline. I can say that this pipeline is first of all a strategic project that offers the Republic of Moldova the luxury of energy security. It is an alternative to a pipe that until now had only one direction. Now, having the second pipeline, the negotiations can be different even over the first pipeline. It is not my role to pronounce weather gas will flow through this pipeline or not,” the ambassador stated.
COVID-19 is putting a lot of pressure on business, study
COVID-19 is putting a lot of pressure on business. Every second interviewed company in August-September operated partially, or closed, temporarily or even permanently. Economic sectors including HoReCa and manufacturing, that are predominantly represented by small and medium-sized enterprises (SMEs), which are largest employers in business, are facing decrease in sales, various uncertainties and decrease in demand, as well as shortage of liquidities. These are among the main conclusions of the socio-economic impact assessment of the pandemic crisis, led by UNDP Moldova, conducted with UNFPA, in collaboration with the State Chancellery and in close collaboration with the rest of UN System organizations. The hardest hit economic sector remains accommodation and food services, as most hospitality venues were forced to close in spring. Hospitality employees were among the most affected in the overall economy especially the ones working in the urban areas. The average number of employees decreased in the 2nd quarter of 2020, compared with the similar period of 2019, with more than 60%.
Procedure for procuring 100 busses for Chisinau should be annulled, AGER
The procedure for purchasing the 100 buses for the municipality of Chisinau should be annulled as the tender contest wasn’t held transparently and multiple violations were committed, representatives of the Association for Efficient and Responsible Governance (AGER) stated in a news conference. AGER representative Olga Diaconu said the municipality seems to have favored bus producer Isuzu. Even if the company that applied to take part in the contest is not the same as the one that took part in last year’s contest, the two companies have the same legal representative. Recently, the National Agency four Dispute Resolution annulled the decision to sign a contract with the chosen contractor and ordered to reassess the bids.
● WEDNESDAY, December 2
Igor Grosu: We call on Cabinet to come up with another draft budget and fiscal policy
The parliamentary group of the Party of Action and Solidarity (PAS) requests the Cabinet to withdraw the draft state budget and fiscal policy laws and to propose new bills that would meet the people’s needs to Parliament. The head of the PAS group Igor Grosu in a press briefing said that the government submitted these important documents in a hurry so that Igor Dodon could promulgate them during the last days of his tenure. “About 60,000 people lost their jobs, while one third of the small and medium-sized enterprises are close to bankruptcy. The government, instead of helping these people, continues to use schemes to promote discredited persons and laws made only for interest groups. Dodon and Chicu left the citizens and business entities to cope by themselves and didn’t offer them appropriate support for them to remain afloat and now propose to Parliament draft fiscal policy and a draft state budget that are disconnected from reality and will continue to deepen the crisis and will leave the people without jobs,” stated Igor Grosu.
Protesting farmers seek immediate meeting with MPs
Farmers from a number of districts of Moldova on December 2 mounted a protest in the central square of Chisinau, expressing their dissatisfaction with the authorities’ attitude, which they describe as irresponsible in relation to the problems they face. According to them, the Government, instead of providing reasonable compensations to diminish the effects of the drought, for 2021 approved a budgetary-fiscal policy that burdens them further. The protesting farmers request the MPs to immediately organize a meeting with them. In a statement adopted during the protest, the farmers ask Parliament to oblige the executive to provide compensations to the farmers affected by drought. “It should identify financial resources for substantially increasing the Subsidization Fund and start to allocate direct subsidies in agriculture and should also identify funds for refunding the excise duties on the bought diesel fuel that is used in agriculture; hold to allow the fiscal pressure on agricultural producers and private individuals operating in agriculture to be increased by raising the VAT rates on agricultural products and the tax on payments made in favor of private individuals,” says the statement.
OpenMoney platform relaunched
The OpenMoney platform was relaunched today. Citizens will be able to track down how public money is spent, as well as who the beneficial owners of contracts granted by state institutions are thanks to this platform. The platform uses open data, which are automatically processed to reveal the connections between the public procurement contracts and final beneficiaries. The initiative belongs to the Institute for European Policies and Reforms (IPRE) and “SENSMEDIA” company, being supported by the United Nations Development Program (UNDP) in Moldova. OpenMoney 2.0 is an updated version of OpenMoney platform, launched in 2016, during the first anticorruption hackathon initiated by UNDP. After its relaunch, the platform will have several new functionalities, including integration of public data from available governmental online platforms and posting information about public procurements, according to the administrative territorial units of the Republic of Moldova. At the same time, the system for collecting and presenting data was improved, and a wide use platform was developed, becoming available for citizens.
Capital city wins 10m lei in auction to assign ambulatory trading places
The Chisinau Carty Hall said that the first open auction for obtaining the right to set up ambulatory trading places on the streets of the capital city was held. 11 places to the total value of over 20 million lei of the 15 exhibited were assigned. Most of the places were distributed for an average value of 2 million lei and more. Other places went for 800,000 lei or 1.2 million lei. Deputy mayor Inga Ionesii said that three lots of the 15 proposed initially were excluded by the tender commission, while another place for which only one bid was submitted will be proposed at the next auction.
● THURSDAY, December 3
MP: Draft fiscal policy document submitted to Parliament is 70% different from initial one
The bill on the fiscal policy for 2021 reached the MPs late. However, the document that was proposed for public consultations and the one that was submitted to Parliament differ in proportion of 70%, stated MPs Vladimir Cebotari and Igor Munteanu. Pro Moldova MP Vladimir Cebotari said the draft fiscal policy law was presented with delay and the MPs weren’t informed about the drafting of the document so that they could contribute to its improvement. “We have a lot of questions as we have to adopt these very important bills during a very short period of time. This means that we can make mistakes or there is the tendency not to take into account many of the problems raised by those from the agricultural sector and the local public authorities,” IPN quoted Vladimir Cebotari as saying.
