The Moldovan Parliament voted today to cancel a number of Customs Code provisions that allowed the operation of duty-free stores in the Transnistrian region, for fear of “potential fraud”.

Arguing in favor of the proposal, Finance Minister told Parliament that in the first five months of this year alone, the three stores operating in Transnistria under Moldovan duty-free licenses sold a billion cigarettes, an amount consumed in the entire Moldova in a year.

MP Sergiu Litvinenco (ACUM/PAS) said the duty-free shops had sales of 2.8 billion lei in the last four years, while some three-quarters of their products are believed to be have originated from contraband schemes involving police and customs officers.

MP Andrian Candu (PDM) inquired how much the economic operator whose license was already withdrawn a few days ago had paid in excise taxes over the years, and how much the state budget is going to lose following the cancellation.

Minister Natalia Gavriliță replied that while excise taxes represent an important source of revenue, in this particular case “we are talking about contraband, which begins to spread into the domestic market as well”. Whereas in 2017 the State Budget received 2.43 billion lei in excise taxes from cigarette sales, in 2018 the number dropped to 1.8 billion lei. This, according to Gavriliță, is an indirect proof of the negative influence of smuggling. “These fraudulent schemes are undermining the rule of law in Moldova, not to mention that these proceeds are being used by certain groups to advance their narrow interests,” declared the minister.

Deputy Speaker Ion Ceban (PSRM) stated that the argument of loss of tax revenue cannot outweigh the fact that smuggling is a criminal offense. 

MP Octavian Țîcu (ACUM/DA) said that any suspicions of fraudulent schemes must be followed by investigations, while his fellow group member Iurie Reniță (ACUM/DA) proposed that the excise tax on cigarettes should be increased regardless of manufacturer or importer.