● MONDAY, July 23

“Summer Berry Fair” features locally grown berries

Berry growers from both sides of the Nistru River came together for the second agro-gastronomic “Summer Berry Fair” this year in the park of the Metropolitan Cathedral in central Chisinau on July 22. The fair featured blueberries, blackberries, goji berries, chokeberries and grapes. The visitors could taste different berry desserts and drinks. The growers had personalized stalls showing the locality from which the berries were brought. The berries were sold in plastic containers with the name of the producer on them. The national berries in such containers are also available from supermarkets. Those who cultivate season berries say a lot of work is done, but this is worth the effort.

Entrepreneur from Falesti complains about wrongdoings in style of 1990s

Vitalie Grushko, of the Association of Entrepreneurs of Falesti town, reports wrongdoings in the style of the 1990s and says that the members of the Association are forced to pay alleged debts. In a news conference at IPN, Vitalie Grushko said the entrepreneurs work on a plot that belongs to the mayor’s office, but this was rented by the local Union of Consumption Cooperatives. The lease was meanwhile suspended. The Union at a certain moment increased the charges for keeping the trading places and many refused to pay, but ultimately complied. Even so, alleged debts for 2013 and 2014 are invoked and the Union went to court to have these paid. “The money from the publicly owned plot must be transferred to the budget of the mayor’s office, not the budget of a business entity,”  stated Vitalie Grushko, who noted that the members of the Association wanted to pay charges for trading directly to the local administration.

Entrepreneur from Falesti deprived of booth and things from inside this

Vitalie Grushko from Falesti town, who is a member of the local Association of Entrepreneurs, said he was deprived of the owned booth and the things that were inside it, including money. In a news conference at IPN, the entrepreneur said a conflict appeared between the Association of Entrepreneurs and the local Union of Consumption Cooperatives over alleged debts invoked by the latter. The entrepreneurs work on a plot that belongs to the mayor’s office, but this was rented by the Union of Consumption Cooperatives for a period. The Union levied trading charges from entrepreneurs. At a certain moment, the Union increased the charges and many refused to pay, but ultimately complied. Even so, alleged debts for 2013 and 2014 are invoked and the Union went to court to have these paid.

Hotbed of African swine fever reported in Vulcanesti

A hotbed of African swine fever was reported in Vulcanesti town last weekend. Two domestic pigs were found dead near a field situated 800 meters from Vulcanesti. In a press release, the National Food Safety Agency said the Vulcanesti exceptional anti-epizootic commission was convened to approve a plan of action for combating the hotbed. Constantin Rotaru, of the Agency’s press service, has told IPN that the police became involved to determine who took the pigs to that place. The town will be in quarantine for two months. The area where the pigs were found is disinfected. Five filters were set up at the entrance to the town. The units of transport are checked and disinfected. Swine cannot be sold at the markets. The last hotbed of African swine fever was detected in a private farm in Mereni village of Anenii Noi district on June 9. The owner is from Mereni, while the farm was about 1.5 km of the village.

Rise in consumption remains driving force of growth, “Viitorul” economist

After the volume of loans provided by banks to the national economy declined continuously during two years and a half, the national economy in the second quarter of 2018 witnessed a growth of 792 million lei comparted with the first three months of this year. In ten sectors of the economy, the volume of released loan rose by 1.33 billion lei, while in five sectors decreased by 540 million lei, expert of the Institute for Development and Social Initiative “Viitorul” Veaceslav Ionita is quoted by IPN as saying on his blog. The expert said population is the driving force of economic growth. Consumption and mortgage contributed 53% to the rise in the volume of loans. Trade and food industry are at the opposite pole. The volume of loans in these sectors in the last quarter decreased by 452 million lei or 84% of the negative volume.

Premier discusses with Chinese companies ready to invest in Moldova

Moldova has a favorable legal framework and an advantageous geographical position and benefits from free  trade with the EU and the CIS. We are ready to discuss different cooperation forms, Prime Minister Pavel Filip stated in a meeting with representatives of two Chinese companies that are ready to invest in Moldova, IPN has learned from the Government’s press service. Pavel Filip told his interlocutors that a governmental team is negotiating a Free Trade Agreement between Moldova and China. He said he appreciates the traditional relations of friendship with the People’s Republic of China and the developing bilateral commercial-economic cooperation relations. The Premier noted that the procedure for entering Moldova was simplified for Chinese citizens in order to stimulate the bilateral relations. These no longer need an invitation for the purpose and those who have a visa or a permit of stay for the U.S., a Schengen state or an EU member state do not need a visa. Pavel Filip encouraged the Chinese companies to take part in the implementation of projects in the strategic sectors of Moldova, such as the road, railway and airport infrastructure, budding of water supply systems energy sector and waste processing.

● TUESDAY, July 24

Significant salary raises can be seen only in an electoral year, comment

The history of the last few years shows the authorities in an electoral year increase the salaries, pensions and allowances rather significantly, while during the years after the elections, until the next electoral cycle, these are increased slightly or not at all so as to bring back the budget to normality or to invest in other areas, expert of the independent think tank “Expert-Grup” Iurie Morcotylo stated for Radio Free Europe. According to the expert, most of these programs are welcomed because of their social orientation as the salaries of budget-funded employees and pensions are small, but the necessity of increasing the allowances is slightly in contradiction with the budget capacities. However, at least at the start of the year, the dynamics of the amounts collected into the budget are positive and exceed the expectations. This enables the authorities to more actively resort to such raises that are most often electoral.

Court of Auditors ascertains distortions in financial situations of Economy Ministry

The property managed by the Ministry of Economy and Infrastructure at the end of 2017 represented about 5.626 billion lei. The institution’s activity is financed with state budget allocations (99.8%) and grants (0.2%). An audit by the Court of Auditors, whose results were made public on July 23, showed the consolidated financial situations do not present a reliable and truthful picture as they contain significant distortions. The audit team said the accounting records of the Ministry showed the institution’s shares and other forms of participation in capital inside the country on December 31, 2017 came to 3.598,7 billion lei. This is by 2.677,5 billion lei less than the figures possessed by the Pubic Property Agency and the Ministry of Finance.

Fuel price ceilings decreased

Gasoline will cost by 0.09 lei less, while diesel fuel by 0.11 lei less during the next two weeks. The price ceilings announced by the National Agency for Energy Regulation for July 25 – August 7 are 19.01 lei per liter of gasoline and 16.89 lei per liter of diesel fuel. According to the Agency, the retail price ceilings for gasoline and diesel fuel are calculated based on the average Platts quotations recalculated in Moldovan lei depending on the official average exchange rate of the national currency against the US dollar for the past 14 calendar days.

Salaries paid unofficially cause damage of 3.5bn lei to national public budget, study

More than 20% of the employees in Moldova receive the salary fully or partially unofficially, shows a survey commissioned by the Institute for Development and Social Initiative “Viitorul” to the CBS-AXA Center for Sociological Research and Marketing. “The study shows the persons who receive the salaries “in an envelope” have lower education, are from rural areas, are young and have low incomes. According to the study, the number of persons who receive the salary officially rose from 75.1% last year to 78.7% in the first half of 2018. The number of employees who get a part of the salary unofficially in the course of a year decreased from 71,000 in 2017 to 40,000 in the first months of 2018.

Festival of Moldovan Grapes and Wines to be held in Poland

A Festival of Moldovan Table Grapes and Wines will be staged in the Polish city Torun at the end of this September. The event will be held for the first time and will bring together over 20 Moldovan producers. The announcement was made at the end of the fifth session of the Moldova – Poland Parliamentary Assembly. According to Ion Balan, head of the Parliament’s commission on agriculture and food industry, the event will represent a very good occasion for the national companies to promote their products, including the Moldovan wines that are in demand in Poland. These could also find partners with which to cooperate in the export of Moldovan products to Poland.

● WEDNESDAY, July 25

Pavel Filip: Entry and stay procedure for investors will be further simplified

The reduction in the number of documents required for legalizing the foreigners’ stay for work and the extension of the permit of stay are among the solutions proposed for further facilitating the procedure for documenting foreigners, including the entry and stay of investors in Moldova. The subject was discussed in a working meeting of Government officials on July 24. According to the Executive’s press service, other proposals formulated in this regard were to extend the period for which the permit of stay for work is issued from one year to two years for workers whose qualification is included in the list of priority occupations and to introduce the right to change the temporary stay status of the foreigner without this being obliged to leave the country.

Vlad Plahotniuc: Government remains business community’s partner

The government remains the business community’s partner. Solutions are being looked for to the existing problems. We want and can change many things in the attitude of each of us and, respectively, in the country’s possibilities. The message was transmitted by the founding president of the Moldova Business People Association (AOAM) Vlad Plahotniuc, the leader of the Democratic Party, in the second Economic Forum for Dialog and Development held in the evening of July 24. Vlad Plahotniuc reiterated the current government’s mission to implement reforms so as to increase the quality of life. He familiarized the invitees with the government coalition’s initiative to adopt a package of laws to stimulate the business community and increase the population’s incomes.

“Expert-Grup” presents performance of Moldovan banks at end-June

Moldova Agroindbank, Mobiasbanca and Moldindconbank top in descending order the rankings of the commercial banks with the best performance. Amid enhanced performance, ProCreditBank and BC BCR Chisinau see a consistent advance compared with the previous months. The rankings were compiled by experts of the independent think tank “Expert-Grup” at the end of this June. The experts said that according to specific indicators, the banks with the most solid capital basis in relation to assets are: BCR Chisinau, Eximbank and EuroCreditBank. The banks with the largest assets are: Victoriabank, Eximbank and BCR Chisinau. The banks with the assets of the highest quality are: FinComBank, BC Mobiasbanca and EuroCreditBank. The banks with the highest return on capital are: Moldindconbank; Mobiasbanca and Moldova-Agroindbank, while the banks with the largest market share by the loan portfolio are: Moldova-Agroindbank; Moldindconbank and Mobiasbanca.

Moldovans would remain in Moldova for a salary of 12,600 lei

The average salary for which a citizen would remain in the country to work is 12,600 lei. In 2018, the accepted average salary is by 2,700 lei higher than last year, when this was 9,900 lei, shows a study carried out by the CBX-AXA Center for Sociological Investigations Marketing. The poll was commissioned by the Institute for Development and Social Initiative “Viitorul”. According to the study, the rise in salary expectations is of 27%, which is more than the nominal rise in the salary in Moldova. The widening of the discrepancy between the salary for which the people would remain in Moldova and the really paid salary shows the intention to migrate to solve the financial problems remains a preference for the Moldovan citizens.

Government to hold talks with European Commission over €12m financing

The Cabinet on July 25 approved the initiation of talks with the European Commission on a financing agreement under which €12 million in financing will be provided through the European Neighborhood Instrument. The money will be used to take measures to ensure the equitable implementation of the commercial legislation, to efficiently manage the state assets and public investments, to strengthen the protection of investors’ rights, to do reforms in the supervision of the financial sector. In the same meeting, the Cabinet approved the initiation of talks and the signing of an agreement between the Republic of Moldova and the European Commission that envisions the allocation of €5 million in support for such areas as civil society, good governance, water and sanitation, waste management and energy efficiency.

Deadline for presenting applications for subsidizing job creation extended

The time limit for submitting applications for subsidizing the creation of new jobs was extended by a month, until August 31, IPN reports. Under the regulations approved last yearend, each newly created job is subsidized with 40,000 lei. The measure is intended for business entities that will increase the number of employees by at least 100 persons. The monthly average salary at the company for newly employed persons should not be lower than 75% of the average monthly official salary. The company should also have no debts to the national public budget. Applications can be submitted online through the agency of the E-application portal or in written form, to the Ministry of Finance.

Cabinet approves legislative initiatives in energy sector

The Cabinet on July 25 agreed a number of legislative initiatives that are aimed at creating the legal framework needed for the system operators to fulfil their obligations related to the exploitation, maintaining, rehabilitation and modernization of electric power and natural gas networks. “By the changes made to the law on electric power and natural gas, the system operators are obliged to sign a framework contract with the owners of land or goods affected as a result of the exercise of the servitude and utilization rights. The contract will specify the rights and obligations of system operators and of the owners of land and goods,” Minister of Economy and Infrastructure Kiril Gaburici explained. The proposed amendments are aimed at ensuring the recovery of the damage caused to the owners of land and goods as a result of the works performed by system operations and at excluding misunderstandings between owners and electricity companies.

Reduction in income tax rate for private individuals to 12% approved by Cabinet

The Cabinet on July 25 agreed a number of amendments and supplements to the legislation in connection with the fiscal reform assumed by the ruling party. The income tax rate for private individuals will be decreased from 18% to 12%, while the employers’ social insurance contribution from 23% to 18%. The annual personal exemption will double to over 24,000 lei. A special fiscal regime will be instituted for the activity of hotels, restaurants and cafes by reducing the VAT from 20% to 10%. The taxi drivers with a monthly salary lower than 10,000 lei will pay a common income tax of 500 lei a month.

Court of Auditors presents report on audit conducted at Ministry of Justice

The consolidated financial situations of the Ministry of Justice on December 31, 2017 do not present a reliable and truthful picture given the significant distortions identified in the central staff and in the managed entities, shows the Court of Auditors’ audit report that was presented in a public meeting on July 24. In 2017, the Ministry of Justice – the central staff and the subordinate authorities – managed financial resources in the amount of 627.8 million lei, including costs of 498.6 million lei and non-financial assets of 129.2 million lei. The audit team established that the central staff of the Ministry in 2017 illegally increased the costs by 6 million lei following the  scrapping of a non-financial asset (computer network).

Business information centers to be opened in eight districts in southern Moldova

Business information centers will be set up in eight districts in the development region South as part of the Southern Gate of Moldova Open to Promotion of Business and Investment Project that was launched on July 25. These will provide consultancy to about 30 entrepreneurs. The eight districts are: Basarabeasca, Cahul, Cantemir, Causeni, Cimislia, Stefan Voda, Leova and Taraclia. Investment profiles and a portal to promote investment opportunities will be designed there.

● THURSDAY, July 26

Fiscal changes will seriously subsidize companies, opinion

The modification of the tax rates will very seriously subsidize companies. These will pay less to the state and will this way preserve the own capital, Iurie Mihalachi, the president of a group of companies, was quoted by IPN as saying in the talk show “Issue of the Day” on Canal2 channel. According to him, this is considerable support for companies. “When the budget deficit is rather large and you take such steps, I think this is an act of heroism. But I don’t know how long the budget will endure this period of lower taxes,” stated Iurie Mihalachi. The entrepreneur voiced hope this will lead to a rise in the amounts collected as taxes and the budget revenues will thus rise. In this case, when the companies keep their capital, they can increase salaries.

“Expert-Grup” points to lack of tangible results in investigation of banking frauds

After over three years of the banking crisis, the financial system of the Republic of Moldova continues to be subject to a broad reform process that covers not only the banks, but also non-banking institutions, experts of the independent think “Expert-Grup” say in the seventh edition of the publication “Financial Monitor”. Fueled by the pressure of the commitments assumed under the memorandum with the IMF and the Association Agreement with the EU, the reforms done so far helped remedy the situation of banks. But the banks’ inability to adjust to the new requirements, in particular as regards lending, remains the main constraint. “Even if it is ambitious and very necessary, the process of implementing the new standards, of Basel III, is a challenge for the commercial banks and their clients and also for the National Bank as the regulator. For banks and business entities that look for funding, the financing rules become much stricter, with significant implications for the business model and even for the profitability of the business. For the regulator, the scope of this process reveals the importance of strengthening the operational, technical and human capacities in order to efficiently implement the new banking legislation,” said economic researcher Dumitru Pintea.

Fiscal reform adopted by Parliament in final reading

A rate of 12% will be introduced on the income tax for private individuals as from October 1 this year. Currently the private individuals are taxed a rate of 7% for revenues under 33,000 lei and of 18% for revenues that exceed this sum. A bill on the reform of the salary income taxation system was adopted by Parliament in two reading. The personal exemption will rise to 24,000 lei a year. For persons who became disabled as a result of the war for defending the county’s integrity and the Afghanistan war, the personal exemption will rise to up to 30,000 lei. For families with children, the personal exemption for maintained persons will rise from 2,520 lei to 3,000 lei, while in the case of maintained persons who became disabled after suffering from a congenital malformation or childhood disease to 18,000 lei. The higher exemption of 18,000 lei will be also applied in case of maintained persons with sever or accentuated disabilities.

● FRIDAY, July 27

Undeclared property could be legalized

Private individuals will be able to declare the undeclared property or property declared at a lower value. The legislative initiative of a group of MPs was passed by Parliament in two readings on July 26. The property that can be declared by paying a tax of 3% of the value or difference by February 1, 2019  includes the financial resources, real estate, securities, shareholdings and motor vehicles owned in the country and abroad.

Veaceslav Negruta: Fiscal reform adopted by Parliament advantages those with large ill-gotten gains

The package of tax initiatives and capital amnesty adopted by Parliament on July 26 advantages and protects those with large ill-gotten gains and brings to an end the investigation and tracing of the stolen bank funds, Transparency International Moldova expert Veaceslav Negruta, ex-minister of finance, stated in the talk show “Politics of Natalia Morari” on TV8 channel. The expert said the calculations done by Transparency International Moldova clearly show that the decrease in the income tax rate for large incomes from 18% to 12% and the rise in the rate for lower incomes from 7% to 12% benefit the citizens with large and very large revenues as these will monthly get 2,000-3,000 lei additionally. “When we speak about agriculture, medicine and education, the people working in these areas will remain with only 6-30 lei additionally in their pockets,” stated Veaceslav Negruta.

U.S. Embassy: Capital amnesty law legitimizes theft and corruption

The Embassy of the United States is gravely disappointed by passage of legislation that will diminish Moldova’s ability to fight money laundering. The law on voluntary declaration and fiscal stimulation, called also the capital amnesty law, legitimizes theft and corruption, and will damage Moldova’s business climate, IPN reports, with reference to the U.S. Embassy. The Embassy considers this law runs contrary to commitments the Government of Moldova has made and this belief is shared by Moldova’s international development partners. “The Moldova people have already suffered the major consequences of financial crimes. Criminals should be punished, not rewarded. The Moldovan people deserve better,” said the Embassy.

IMF: Package of tax initiatives is not in line with objectives of Fund-supported program

In IMF staff’s preliminary view, the recently approved package of tax initiatives and capital amnesty are not in line with the objectives of the Fund-supported program. Specifically, the adopted measures will increase the regressivity of the tax system, could undermine tax compliance, and pose significant fiscal risks, IPN reports, quoting a press line of the International Monetary Fund. According to the IMF, staff is in the process of assessing more fully the implications of the adopted package as more information becomes available.

Persons holding several jobs will not have to present tax returns

The persons who hold more than one job will no longer have to submit tax returns, Yuri Likii, deputy head of the Tax Service, stated, referring to the tax initiatives adopted by Parliament on July 26. Yuri Likii said tax returns will be presented only by persons who, having several jobs, will earn money from the sale of assets. “These changes will simplify fiscal administration. Earlier the people who held several jobs had to submit tax returns by March 1. With the introduction of the common income tax rate, this requirement will no longer refer to this category of citizens,” he noted.

Entrepreneurs could profit from lower taxes to increase employees’ salaries, MP

The entrepreneurs in Moldova will be able to profit from the reduction in taxes to raise the salaries of employees, MP Eugen Nichiforciuc was quoted by IPN as saying in the talk show “Issue of the day” on Canal2 channel. According to him, this is a possibility for some of the citizens to return home. “The effects will be felt immediately and this is very important for creating new jobs and for increasing salaries given that there is a shortage of staff in many areas and we will stimulate the people to remain and work in the country,” stated Eugen Nichiforciuc.

Air Moldova to be privatized

Air Moldova Airline will be put up for privatization in a commercial contest alongside another 11 state-owned enterprises, IPN reports, with reference to the Public Property Agency. The commercial contest will take place as part of a new public property privatization round during July 27 - September  4 (deadline for the submission of bids). Within the new privatization round, during September 3-7, outcry tender contests will be held on the regulated market to sell state-owned shareholdings in 21 joint stock companies, 16 of which are majority ones, including in SA “Barza Alba” and SA “Tutun-CTC”, and 11 shareholdings in road maintenance companies. The cinemas “Prut” in Falesti and “Patria” in  Leova will be repeatedly exhibited at an investment contest. The main condition in this contest is to transform the cinemas into centers of culture and recreation. September 4 is the deadline for submissions. A contest to privatize 16 real estate complexes, 12 state-owned enterprises (undividable complexes) and an unfinished building will be held on September 5. Submissions will be accepted by September 4, 4pm. Under the 2018 state budget law, as a result of the privatization the buyers pay a tax of 1% of the value of each transaction.

● SATURDAY, July 28

World Bank deeply concerned about adoption of fiscal reform

The World Bank Group is deeply concerned by the recently approved package of tax initiatives and capital amnesty, as it may undermine the Moldovan Government’s commitment to fighting corruption, it is said in a press statement published on the official website of the WB. According to the statement, the package of tax initiatives and capital amnesty could have a negative impact on tax compliance, leading to significant fiscal risks. The package is inconsistent with the policy reform program supported by the World Bank Group. The statement says the World Bank will continue assessing the consequences of the adopted package as more details become available.

System of taxes for using roads when transiting Moldova modified

The current system of taxes for using roads when entering and leaving the Republic of Moldova has been modified. Parliament adopted a bill to amend a number of legislative acts in this regard, submitted by a group of MPs, in the second reading on July 27. The amendments introduce the mechanism concerning the application of the vignette for minibuses, buses, trucks and trailers registered in the Republic of Moldova, replacing the current system of taxes for using roads when entering and transiting Moldova. The new mechanism provides for the diminution of the tax for using Moldovan roads for motor vehicles that are not registered in Moldova, depending on the period of stay on the country’s territory and the category of vehicle. The vignette will be valid for one day, 7, 15, 30, 90 and 180 days, and 12 months. The period of validity will start at 12 midnight of the day requested by the applicant and will end at 11:59pm of the last day of the period for which the tax is paid.

Transfers from abroad to Moldova this June up 8.5% on last June

The cash transfers through foreign licensed banks to Moldovans this June came to US$ 117.48 million, an increase of 8.5% comparted with last June, IPN reports, with reference to a press release of the National Bank of Moldova. The transfers from the EU represented 39.7%, from the CIS – 30.5% and from the rest of the countries – 29.8%. The transfers from Russia accounted for 29.3% (US$34.47m ) of the total, a decrease of 6.4%, from Israel for 16.5 (US$19.43m), from Italy for 12.1% (US$14.25m), from the U.S. for 8.4% (US$9.92m), from Germany for  6.5% (US$7.61m), from the UK for 5.9% (US$6.93m), from France for 3.8% (US$4.41m), from Spain for 1.3% (US$1.52m). The transfers in dollars represented 45.9 %, a decrease of 3.1% compared with June 2017, in euros – 45.6%, up 4.5%, in Russian rubles – 8.5%, down 1.4%. In June 2018, compared with the similar period last year, the fluctuations in the exchange rate of currencies against the US dollar contributed 2.7% to the total growth of the value of transfers from abroad to private individuals, but the effective rise in transfers, without the effect of the exchange rate, was 5.8%.