All agricultural and local taxes to be merged into one comprehensive tax

All taxes on agricultural products and all local taxes will be merged into one comprehensive tax, under a bill developed by the Ministry of Agriculture and Food Industry, which was recently finalized and, most likely, will be submitted for approval at the next Government meeting, reports Info-Prim Neo. Minister of Agriculture and Food Industry Vasile Bumacov explained that agricultural producers will have to pay four taxes, i.e. the VAT and contributions to the social fund and the medical insurances one. However, the income, land, realty, traffic, water and other local taxes will be merged into one comprehensive tax, also know as a flat-rate tax. The Minister has communicated that farmers had requested the merging of all taxes into one as early as 2009, since it takes them too much time and effort to pay them all. Vasile Bumacov claims that time was needed in order to develop a viable bill, added to the analysis of the Russian and Ukrainian experiences, in order to determine the best practices. Thus, the project has been finalized, and the flat tax would be calculated using a certain formula that results from the quality of the cultivated land and an average coefficient of 3.12. This coefficient is different for different cultures, 3 for cereals, 3.5 for sunflower and sugar beets, and 4 for multiannual cultures. The Minister has specified that many farmers want the coefficient to be smaller, whereas Main State Tax inspectors want it to be larger. “We have made the calculations arising from our realities, tried to be unbiased, and avoid being influenced by neither of the parties”, said Minister Bumacov, who added that the ratios, however, are still under discussion. Meanwhile, farmers would have the possibility to cover this tax within two payments, one until September 31 and the second until December 31. If the bill is adopted by the Government and Parliament, it will become effective starting January 1, 2013.