● MONDAY, January 30
Plane tickets for €49 and up for 26 destinations
Air Moldova puts promotional tickets on sale. The offer covers the period between January 30 and February 28 and applies to all the direct flights of the airline that will be operated during February 6 and October 28, 2017. One-way tickets cost €49 and up, with all taxes included. In a press release, Air Moldova says the tickets are available from its website and from the own and authorized agencies in the country and abroad. For further information, passengers can call the airline’s Call Center on + 373 22 830 830.
“Made in Moldova” to include record number of bilateral forums
The Chambers of Trade of Romania, Belarus, Austria, Hungary and Russia will be present at bilateral forums that will be held within the exhibition “Made in Moldova”. Chairman of the Chamber of Trade and Industry of Moldova Sergiu Harea told a news conference that a record number of bilateral forums will be staged this year and they hope a large number of cooperation agreements to boost Moldova’s exports will be signed as a result of these. The business program of the exhibition starts on January 31 with the Moldovan-Russian bilateral forum that will involve representatives of the central and local public authorities, business associations, representatives of the Chambers of Trade of the Russian Federation and business entities. In the first half of February 2, a bilateral Moldovan-Romanian forum will be held, while in the afternoon – a Moldovan-Belarusian forum. The Moldovan– Austrian forum on February 3 will involve companies from the IT, health, building and agricultural machinery sectors.
Economy has been slightly decoupled from remittances, expert
The remittances remain an important source of financing for domestic households. However, the Moldovan economy has been slightly decoupled from remittances, considers economic expert Alexandru Fala. Asked by IPN to comment on the National Bank’s data showing that the remittances transferred from abroad to private individuals in Moldova have declined, the expert said he intuited that the remittances will decrease and the unfavorable dynamics of the Russian economy is a relevant argument. “On the other hand, we see economic growth even if remittances decline. A first hypothesis is that apart from remittances, there are particular forces in the economy that stimulate it,” said Alexandru Fala.
● TUESDAY, January 31
New deadlines for paying ecological tax
Starting with this year, the business entities that pay an ecological tax will be able to pay this by the date of 25 of the next month, not on the importation date as earlier. Also, the environment pollution tax that was managed by the Customs Service will be now administered by the State Tax Service. In a press release, the State Tax Service says the pollution tax is to be paid by legal entities, regardless of the type of ownership and legal organizational form, and by private individuals who perform entrepreneurial activities and who produce, import or purchase goods in plastic packing from business entities that operate in Moldova and do not have fiscal relations with its budget system. These goods include those packed in corrugated cardboard, with or without aluminum foil or polyethylene.
Ministry of Economy: We aim to attract US$250m in foreign investment
The Ministry of Economy for this year forecasts an economic growth of 3.5% according to the pessimistic scenario and of 6.5% according to the optimistic one, Minister Octavian Calmac told a news conference where he presented the Ministry’s priorities for 2017. The main sectors of the national economy that will fuel the GDP growth up to 6.5% will be: agriculture – by 0.7 percentage points, industry – by 1.2 p.p., services – by 3.3 p.p., net taxes on products and imports – by 1 p.p., gross fixed capital formation – by 2.7 p.p. “In 2017 we aim to attract US$250 million in foreign investment to the national economy, which is by about 30% more than in 2016. We hope to increase exports to US$2.250 billion and to thus ensure a 10% growth compared with last year,” stated the minister.
Three rounds to privatize state property planned for 2017
Three rounds to privatize state property will be held this March and June and at yearend, Minister of Economy Octavian Calmac told a news conference. “There will be privatized assets that were exhibited for sale the previous years and remained unsold, but the selling price will be reduced by ensuring the necessary transparency (reduction cap is of 5%, but some of the assets put up for sale remained non-privatized – e.n.). These will be mainly sold through the Moldova Stock Exchange. The more sensitive facilities will be privatized through individual projects. Therefore, we will ask foreign experts to help us implement the best practices in the field and to determine their market value,” stated Calmac. The earnings from privatization are primarily used to cover the budget deficit.
Products containing mercury could be banned after 2020
The Parliament’s commission on social protection, health and family approved the bill to ratify the Minamata Convention that regulates the supply and sale of mercury. Under the treaty, the manufacture, import and export of products containing mercury and production processes that involve the use of mercury and its compounds will be banned after 2020. The states that do not manage to comply with this ban after 2020 can ask to extend the period of compliance by at most ten years, exhaustively justifying the necessity of such an extension.
National accreditation system to be assessed by European bodies
The Ministry of Economy and its subdivisions plan to adjust 70% of the national standards to the European ones. “In this connection, we should make these standards public so that the business entities implement them. When they are applied and the products or services meet the European standards, they become an instrument that stimulates exports,” Minister of Economy Octavian Calmac said in a news conference. He noted that in 2017, the national accreditation system will be subject to an international assessment by expert European bodies. “If we successfully pass this assessment, our products will be able to penetrate the European market, avoiding double certification and control,” stated the minister.
● WEDNESDAY, February 1
Transnistria requests Russia to offer it consultative and financial support
The administration of the Transnistrian region asked the Russian Federation to provide financial support to it for developing the economy and consultative assistance in doing the fiscal and budgetary reforms, IPN reports, quoting the unrecognized government of the region. Transnistria requested to be offered a long-term loan of US$130 million, providing calculations done based on the region’s economic indicators. The ratio of persons who work in the real sector of the Transnistrian economy to pensioners is 106.7:100. Almost half of the 134,500 working persons are budget-funded employees. The fiscal pressure on the business sector is very big and represents 35% of the GDP.
Central bank revises rate of inflation up
The National Bank of Moldova forecasts an annual rate of inflation of 5.2% for 2017 and of 4.9% for 2018. The new figures are higher than the ones projected in the previous forecast round, but are within the interval of 5% ±1.5 percentage points stipulated in the Bank’s average-term monetary policy. National Bank governor Sergiu Cioclea told a news conference that the annual rate of inflation in the fourth quarter of last year was 2.5%, down 2 percentage points compared with the third quarter. Last December, inflation was 2.4%. The annual rate of inflation diminished owing to the modest demand on the home market and the rich harvest in the agricultural sector. In December 2016, the annual rate of food price inflation stopped at 2.8%, while the prices of regulated services declined by 1.1% compared with December 2015.
Biomass boilers, mushrooms, antibiotics and others at “Made in Moldova” exhibition
The national exhibit “Made in Moldova” brought together producers from all over the country at the exhibitions center “Moldexpo”. During six days, over 350 producers will promote their goods and services, the Chamber of Trade and Industry has said. In the opening of the event, Prime Minister Pavel Filip said a business entity now shouldn’t be large, but should be intelligent. The Government he heads is pro-business and aims to make investments in the public and private sectors. Victor Manastirli from Ciadar Lunga is a blacksmith and makes metallic gates, garden furniture and metallic boilers. He exhibited a biomass boiler that can heat a home of 150-200 square meters. The entrepreneur has told IPN that he decided to make boilers owing to the large quantity of waste and biomass present in his settlement. He made the first boiler about five years ago. A boiler made in Ciadar-Lunga costs about 30,000 lei.
Victor Parlicov: NAER’s decisions are synchronized with political needs of government
The decisions concerning tariffs taken by the National Agency for Energy Regulation (NAER) during the last two years have been synchronized with the immediate political needs of the government, considers expert of the Institute for Development and Social Initiative “Viitorul” Victor Parlicov, ex-NAER director who applied again for this post. He published a position note on the examination by the Agency of the request to increase the heat tariffs made by SA “Termoelectrica” last August. The author says that in order to give legitimacy to such decisions, the NAER resorts to ‘creative juridical solutions’, exploiting the legislative exceptions and shortcomings, defying simultaneously the regulation principles and spirit of the laws that govern this sector. According to him, making use of the fact that the special laws that govern the sector do not ban the suspension of decisions regarding tariffs, in September 2015, before the announced protests, the Agency made such a decision, defying the legislation.
Speaker suggests implementing meal voucher system
Speaker of Parliament Andrian Candu proposed implementing a meal voucher system. A relevant legislative initiative was presented to trade unions, employers, businesses and state institutions concerned on February 1. The voucher will be provided optionally by employers as an employee benefit. The employees will be able to use them at canteens, in shops and even restaurants, but only for food, not yet cigarettes and alcoholic beverages. The implementation of the meal voucher system is optional. “The meal vouchers are a supplement to the salary. They are remuneration that is not taxed for private individuals and their cost is deductible for employers,” stated Adrian Candu. The meal voucher system is successfully used in Romania, Germany, Austria and other states. The vouchers are distributed by a licensed operator in the form of paper tickets or cards and contain security elements.
Moldovan-Belarusian agreement to facilitate bilateral trade
The Cabinet on February 1 approved an agreement between the Government of Moldova and the Government of Belarus concerning the system for facilitating bilateral trade. The document envisions the intensification of cooperation between the customs authorities of the two states with a view to increasing the efficiency of customs control and of reducing clearance and border crossing time. It is also regulated the method of exchanging information about the movement of freight and units of transport to and from Belarus. The agreement was signed in Chisinau at the end of 2016.
Consultative Council for SMEs to be set up
The Cabinet approved the constitution of a Consultative Council for Small and Medium-Sized Enterprises that will work under the Ministry of Economy. The new entity will represent a platform for interaction between entrepreneurs and the authorities and for launching new programs to develop the sector. The Council will involve representatives of the business sector and civil society, who will analyze the framework that regulates entrepreneurial activity and will submit proposals for improving it. Its members will also formulate recommendations for implementing programs to support the SME sector and develop the entrepreneurial spirit in Moldova. According to official statistics, the SMEs represent over 97% of all the enterprises in Moldova. Their contribution to the GDP makes up approximately 32%. Thesmall and medium-sized enterprises employ about 56% of all the working people.
● THURSDAY, February 2
Central bank to carry out all-inclusive inspection at banks
The National Bank of Moldova aims to carry out an all-inclusive inspection at the banks that work in the Republic of Moldova, the Bank’s governor Sergiu Cioclea announced in a news conference on February 1. “We will verify the shareholders and the quality of assets. We will also check if the banks obey the prudence norms set down by the legislation,” Cioclea stated when asked by journalists to explain what all-inclusive inspection means. The governor said that if minor violations are identified, the banks will have to work out remedying plans. If the violations are big, they will be penalized.
IMF expert to provide assistance to State Tax Inspectorate
An expert in fiscal administration of the Internal Monetary Fund (IMF) will provide assistance to the State Main Tax Inspectorate within the technical assistance project supported by the Government of the Netherlands. Shawn Gale will work in the State Tax Service throughout the project implementation period, which is of three years. The technical assistance project aims to ensure the fiscal compliance of private individuals with large incomes and the administration of large taxpayers, the organizational reform of the State Tax Service and strengthening of the capacities to counteract large-scale tax frauds.
Farmers asked for subsidies of over 640m lei last year
The Agency for Intervention and Payments in Agriculture last year received 4,549 applications for subsidies from agricultural producers, to the total value of 641 million lei. The Agency’s director Nicolae Ciubuc told a news conference that the number of applications is higher than a year before. The financial resources available in 2016 were used to pay overdue agricultural subsidies for 2014 and 2015. There were accepted 1,700 applications submitted in 2016, to the value of 230 million lei. The subsidies based on the other 2,800 applications that could not be satisfied last year are paid from the agriculture subsidization fund for 2017. 1,000 agricultural producers already received the money. The other pending applications will be satisfied in two-three weeks so that there are no debts for last year by March 1, when applications for subsidies for this year will start to be accepted.
New IMF mission to assess authorities’ progress
An International Monetary Fund (IMF) mission will visit Chisinau during February 14-28, 2017. The mission will take stock of the recent economic developments and the progress in authorities’ program implementation in the context of the first review of Moldova’s IMF-supported program under the Extended Fund Facility (EFF) and the Extended Credit Facility (ECF) arrangements. Ben Kelmanson has replaced Ivanna Vladkova-Hollar as the IMF mission chief for Moldova from January 2017.
New provisions concerning provision of agricultural subsidies
The agriculture subsidization process will be organized based on new regulations starting with this year. Deputy Minister of Agriculture and Food Industry Iurie Usurelu told a news conference that the regulations are valid for five years so that the farmers will be able to plan the business and to ensure its sustainable development. Iurie Usurelu said the subsidization regulations have economic substantiation for each category and contain the clear classification of producer groups - large, medium-sized and small – so that unconditional and freer access is ensured for all groups of producers by subsidization and related activities.
Fiscal perspectives for 2017 presented to business entities
The main tendencies in the Moldovan legislation and the challenges faced by Moldovan companies in the fiscal, customs and labor areas were discussed in a conference organized by KPMG in Moldova together with Vernon David on February 2. Experts in fiscal administration and legal matters of the two companies and representatives of the Ministry of Finance told the about 200 entrepreneurs who took part in the event about the main fiscal novelties and answered businessmen’s questions. Attending the event, Minister of Finance Octavian Armasu said the fiscal policy for 2017 envisions a series of novelties. One of them is the Anticipated Individualized Fiscal Solution, which is a document issued by the fiscal authorities to enable a private individual or legal entity that carries out entrepreneurial activities to regulate specific fiscal situations. This is an additional instrument, besides letters received by the State Tax Service and the Ministry of Finance, which is aimed at increasing transparency in implementing the fiscal legislation and improving the investment climate in Moldova.
Farmers obliged to return received subsidies to state
Seventy farmers who received money from the agriculture subsidization fund will have to return it to the state owing to irregularities identified by representatives of the Agency for Intervention and Payments in Agriculture. The sum totals 15 million lei. The Agency’s director Nicolae Ciubuc told a news conference that the irregularities were detected as a result of inspections carried out at farmers. Over 2 million lei was returned voluntarily. In the other cases, the farmers were sued.
Opening of agritourist pensions to be subsidized by state
Those who will want to start a business in agritourism will be able to access state subsidies, as it is provided in the new subsidization regulations for 2017. Deputy Minister of Agriculture and Food Industry Iurie Usurelu has told IPN that subsidies of 4 million lei will be provided for founding agritourist pensions during the first three years of the starting of the business, while the total sum during five years cannot exceed 9 million lei.
Native sorts of grape prevail on new vineyards
More than 570 hectares of vineyards were planned in Moldova last year. Table grape sorts were planted on 55% of this area. Director of the Agency for Intervention and Payments in Agriculture Nicolae Ciubuc told a news conference that the agricultural producers focused mainly on native sorts. The sort “Moldova” is a leader and accounts for 70% of the new table grape plantations. As regards the technical sorts of grape, there were primarily planted such sorts as “Feteasca” and “Rare Black”. Over 10 million lei was allocated from the subsidization fund for new vineyards.
● FRIDAY, February 3
Draft law on tax stimulation has several shortcomings, German expert
The intention to decrease the share of the shadow economy, to incentivize tax evaders to declare hidden assets and increase tax compliance in general is positive. However, the law initiative on capital liberalization and tax stimulation submitted to Parliament for adoption is unlikely to achieve those objectives as it has several shortcomings, said German Economic Team Moldova project manager Jörg Radeke, who was asked by IPN to pronounce on the proposed capital and tax amnesty. The German expert said international best practice defined in the guide for voluntary tax compliance programs (VTC) provided by the Financial Action Task Force on Money Laundering (FATF) demands for an extraordinary situation, e. g. a severe economic crisis, to conduct a VTC program. This is not the case in Moldova, which has a sustainable public budget and expects to receive sufficient international financial support in 2017.
2017 Chisinau budget to be approved soon
The works on the draft Chisinau municipal budget for 2017 were finalized and this is to be put to the vote in the near future. The announcement was made in the talk show “Moldova live” on the public TV channel Moldova 1. Chisinau councilor on behalf of the Liberal Party Mihai Ceban said the voting of the budget was earlier impossible. “I agree that the municipal budget should have been adopted faster, but not everything is possible when the mayor and councilors want. The budget is drafted according to a particular procedure. The state budget was adopted and time was needed for adjusting this. In the February 2 meeting of the Chisinau Municipal Council, the draft municipal budget for 2017 was to be voted in the first reading, but the councilors didn’t manage to given that the agenda included seven issues. I think the draft municipal budget will be carried in the first reading next week,” stated the Liberal councilor.
Premier has discussion with representatives of Foreign Investors Association
The foreign investors feel improvements in the business sector of Moldova following the Government’s decisions to institute a moratorium on state inspections and to reduce the number of entities with inspection duties, the administration of the Foreign Investors Association of Moldova (FIA) stated in a meeting with Prime Minister Pavel Filip. The meeting involved the new Chairman of FIA Board of Directors Alexander Koss and ex-FIA President Ridha Tekaia. According to the Government’s press service, the meeting discussed the FIA’s projects for this year, including its activities as head of the working group to stimulate and maintain private investment set up under the Premier’s Economic Council.
Entrepreneurs from both sides of Nistru River informed about trade with EU
More than 80 entrepreneurs from both banks of the Nistru discussed the advantages of the Free Trade Agreement with the EU within the Support to Confidence Building Measures Program. Among the most important topics for discussion were customs clearance of goods, work of the Trade Facilitation Committee, good import-export practices and activity of the Enterprise Europe Network in Moldova. Head of the EU Delegation to Moldova Pirkka Tapiola said the EU remains Moldova’s main trading partner and the most important export market, which absorbs 64% of Moldova’s exports. “Trade with the EU remains an important pillar of the Moldovan economy. I’m glad to see entrepreneurs from both sides of the Nistru River in this hall. It is very important for you to use the available instruments and make use of the opportunities for exporting to the market of the European Union, which has the biggest purchasing potential,” he stated.
Blacksmith from Ciadar-Lunga brings boiler made by him at “Made in Moldova”
Blacksmith Victor Manastirly from Ciadar-Lunga is present at the exhibit “Made in Moldova” with biomass boilers made by him. The entrepreneur has told IPN’s reporter that he started by making iron gates and fences and in time learned to forge metal to make decorative objects for gardens and then boilers. The idea of making boilers adjusted to the conditions in Moldova came to his mind when he saw how much biomass waste is burned in the fields. Victor Manastirly said resources that can be used to heat homes are burned in Moldova. The boiler was patented and he is the only one who has the legal right to make it.
Simplified taxation system for individuals involved in independent activities
The private individuals who practice independent activities benefit from a simplified taxation system. This applies to independent activities in retail trade, except for excisable goods, as a result of which revenues lower than 600,000 lei in a fiscal period are earned. The new system is defined in the fiscal legislation and started to be applied on January 1, 217, IPN has learned from the Chisinau State Tax Inspectorate. The individuals can register their activity by submitting applications to the local subdivisions of the State Tax Service. The income tax is 1% of the revenues earned from independent activity, but not less than 3,000 lei a year. The tax is fully paid into the treasury income account of the budget of the territorial-administrative unit, according to the domicile of the taxpayer. The payment is made in installments, each quarter, by the date of 25 of the month coming after the corresponding quarter.
The entrepreneurs are exempted from paying the territorial development tax and tax for commercial units and/or service providing units. These are also obliged to use cash registers that enable to correctly assess the incomes gained from independent activities and ensure the protection of consumer rights.
● SATURDAY, February 4
Hundreds of lei in taxes for terminating contracts with TV program distributors
Those who sign contracts with TV program distributors by examining the packages only risk having unpleasant surprises if they decide to terminate the contract before time. Most of the distributors levy contract termination taxes that can amount to 1,500 lei, depending on the operator and package. The National Regulatory Agency for Electronic Communications and Information Technology (ANRCETI) said the contract termination taxes are a legal practice and these are applied in other states as well. The persons must attentively read the clauses before signing the contract. A market analysts by IPN’s reporter shows that the highest contract termination taxes in Chisinau municipality are applied by Starnet, which does not have separate TV packages as these also include Internet services. The contract is valid for minimum two years. If the client terminates the contract earlier, this must pay a tax of 1,500 lei.
Central bank names temporary administrator at BC “Moldindconbank”
The Executive Board of the National Bank of Moldova appointed Romanian citizen Sorin Andrei as temporary administrator with powers of the Board of BC “Moldindcondbank” S.A. The decision was taken after the term of temporary administrator Nicolae Dorin, who is the president of the Banks Association of Moldova, expired and could not be extended. According to the National Bank of Moldova, Sorin Andrei has rich experience in the financial-banking sector. He earlier worked as executive director of bank branch, regional-corporate director at the Romanian Commercial Bank (BCR) and vice president and president of the Board of Directors of BCR Chisinau S.A.
Amendments proposed to state budget law
The Ministry of Finance has modified the bill to amend and supplement the 2017 state budget law. Both the state budget revenues and expenditure could be increased by 385.9 million lei. The budget deficit remained unchanged. The draft law was published on particip.gov.md. According to the Ministry of Finance, the bill was amended in order to adjust the budget indicators, given the rise in allocations from the state budget to the local budgets and the allotment of a part of the road fund to these. A liquidity reserve will be formed so as to improve the management of the state debt. In this connection, it is proposed increasing the balance of the internal state debt and, correspondingly, the balance in accounts at the end of 2017.
IMF conditions for Moldova
To secure the program with the IMF, the government of Moldova had to fulfill an unusually large number of upfront conditions, including to implement measures to increase bank shareholder transparency and strengthen the supervisory powers of the National Bank. Furthermore, energy tariffs for households have to be raised to cost recovery level and lending to state companies has to be made transparent. The German Economic Team Moldova (GET Moldova), which consults the executive in modeling the processes needed for economic reforms, took stock of the prior actions assumed by the government. GET Moldova noted the government has agreed that all other banks will have to undergo the same process of identifying the real owners and auditing their loan books in order to uncover dodgy lending practices. Moreover, coverage of the Deposit Guarantee Fund will be increased to avoid that the government has to provide costly state guarantees or recapitalize banks as was the case during the recent bank fraud.
