Only 1% of the organizations that benefit from the percentage distribution mechanism or the “2% mechanism” collect over 30% of the resources allocated by taxpayers. An imbalance between the top and bottom organizations is witnessed this way, ASIST Analytics author Danu Marin said when presenting the results of an analysis carried out by the National Council of NGOs of Moldova and CONTACT Center.
In a news conference at IPN, Danu Marin said that another problem is that the mechanism focused a lot on the regions in central Moldova. Chisinau has the largest number of beneficiaries of this mechanism. More than 90% of the financial resources allocated through the percentage distribution mechanism remain in the capital city. This thing does not contribute to the development of civil society in other localities of the country.
Also, most of the resources are concentrated in four types of organizations – social protection organizations, religious organizations, sports organizations and charity and health organizations. These organizations collect more than 80% of all the resources. Respectively, the organizations of another type, such as the education ones, benefit from such resources to a much smaller extent.
Mark Mazureanu, ASIST Analytics author, said the small beneficiaries get by 15 lei through this mechanism, the middle-sized ones – from 1,000 to 15,000 lei, while the large ones up to 700,000 lei. The top organizations didn’t want to discuss with the authors of the analysis, while the middle-sized ones took part in interviews. The problems mentioned by these refer to the management of funds and the process of reporting based on this mechanism.
Since 2017, the private individuals who pay taxes to the state have been able to direct 2% of the income tax to the entitled organizations, namely civil society organizations and religious denominations. A taxpayer can direct the whole sum to one organization. In other states, the sum can be divided to a number of organizations or the taxpayers can allocate the money for a budgetary period. This way, the funds are distributed to a large number of organizations and such a practice is proposed to be introduced in Moldova too.
The non-proportional stimulation of noncommercial organizations by geographical areas was mentioned as a problem by the beneficiaries. Many of them said the taxpayers from a particular region redistribute the 2% of the income tax paid to the state to organizations registered in this area.
The analysis was presented by the National Council of NGOs of Moldova and CONTACT Center. It was carried out in cooperation with the State Tax Service and with beneficiaries, through interviews. It covered the period between 2019 and 2020.
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