The Government will submit to Parliament the bill that envisions the capping of local taxes and will insist on its adoption, Prime Minister Ion Chicu posted on Facebook.

“Any cheap political speculation on the issue is costly (for economy and investors). The attraction of investors to the 18 industrial platforms form districts and to the other localities of the country is not possible without clear predictability in terms of taxes,” wrote the Premier, being quoted by IPN.

Ion Chicu reminded that the mayors are remunerated from the taxes paid by the signatories of the Declaration of the Business Community (which supports capping of local taxes) and called on the mayors to return to work and work for the benefit of the people who elected them.

Mayors and representatives of the Congress of Local Authorities of Moldova (CALM) on November 27 protested in front of the Ministry of Finance and then marched to the Government Building, protesting against the Cabinet’s intention to cap local taxes. They said the initiative runs counter to the Constitution and the international commitments, being an attack on local self-government and on the decentralization principle. The local authorities are limited in their right to independently design and implement the fiscal policy. This will lead to the limitation of the resources for supplementing the local budgets and, consequently, to the reduction of the possibilities of solving people’s problems.

Also, a number of business associations signed a public statement in support of the Ministry of Finance’s initiative to cap local taxes that, according to them, is aimed at ensuring predictability in entrepreneurial activity. The statement says local self-government is one of the basic principles of the local public administration, being guaranteed by the national legislation and by the international one.  However, the legislation does not restrict the setting of upper limits on local tax rates by law. Both the Constitution of the Republic of Moldova and the European Charter of Local Self-Government allow for the setting of local taxes within the limits of the law. The taxes are exaggerated in parts and should be reduced. The entrepreneurs are in favor of capping local taxes during three years by annually indexing these based on the inflation rate.