ECO-BUS WEEKLY DIGEST January 6-12. Most important Economy & Business news by IPN
● MONDAY, January 6
Ion Chicu: State budget revenues in 2019 exceeded those of 2018
The state budget revenues in 2019 were by 3.7 billion lei higher than the revenues of 2018. The revenues collected by the State Tax Service rose by 760 million lei, those collected by the Customs Service – by 1.4 billion lei, while other revenues were by 1.3 billion lei higher. In a Facebook post, Prime Minister Ion Chicu said the budgetary system of Moldova is well formed, but there is yet place for improvement. According to the Premier, the budget can cope with many risks, such as parliamentary and local elections during a year and political crises. Despite the over 17% decline in the state social insurance contributions for the private sector in the first three quarters of 2019, the own revenues of the state social insurance budget increased by 764 million lei compared with 2018 and by almost 1 billion lei compared with the initially projected figure.
Three new flights to become available from Chisinau airport
Flyone has announced the launch of the direct flights Chisinau-Frankfurt Hahn (HHN) - Chisinau and Chisinau-Tel Aviv (Ben Gurion) - Chisinau, while Air Moldova will start to operate flights on the Chisinau-Berlin (Schönefeld) - Chisinau route. The flights to Frankfurt will be available from April 6 this year twice a week, on Mondays and Wednesdays, while from July three times a week. As of April 9, Flyone will provide flights on the Chisinau-Tel Aviv (Ben Gurion) – Chisinau route on Thursdays.
● THURSDAY, January 9
Taxing of digital companies in Moldova could remain unimplemented, study
The initiative to tax digital companies, such as Facebook, Google and other nonresidents that manage different applications on Moldova’s territory could remain unimplemented if the international character of the problem is neglected. “Going alone against companies that earn colossal revenues by any standards can undermine the efficiency of the whole system and can even affect the relationship with the United States,” says a study conducted by expert Vladislav Kaim for WatchDog.md community. According to the author, the Moldovan Government has at its disposal two more strategies that enable it not to go against the digital giants alone, but to use the own weapons of the giants. The first move is to put off the implementation of the new tax until January 1, 2021 as a common digital tax will be continuously introduced in the EU by then. This will enable Moldova to join its tax regime for digital companies to the regime applicable to the largest common market of the world. Such a decision can lead to a series of positive secondary effects, like the capacity to swifter obtain the recognition of the observance by Moldova of the standards stipulated by the new EU data privacy regulation, etc.
Monthly pays on right side of the Nistru are by 50% higher than on left side, expert
The most dramatic changes in labor remuneration in the Transnistrian region occurred during the past four years. In 2015, the average salary on the left side of the Nistru River was by 40% higher than on the right side. But the situation changed diametrically in 2019, when the pays were by 50% higher than on the left side, economist Veaceslav Ioniță, expert of the Institute for Development and Social Initiatives “Viitorul”, wrote on his blog. During 20 years with small exceptions, the average salary on both sides of the Nistru was at the same level. The situation started to change after 2013, when the so-called authorities of the Transnistrian region decided to artificially maintain the exchange rate. On the one hand, this improved the salary conditions of employees as the pay rose much faster than on the right side of the Nistru. But the artificial maintaining of the exchange rate in the Transnistrian region resulted in a negative value of the foreign exchange reserves at the start of 2016. Since 2016, the central bank of the Transnistrian region hasn’t published the data about the foreign exchange reserves, but informed that these continue to be negative.
Moldovan leu reaches five-year high
The Moldovan leu started 2020 at a five-year high, reaching the level of 18.28 against the EURO&USD currency basket. The leu appreciated less against the US dollar, but improved considerably its value against the euro, economist Veaceslav Ioniță, expert of the Institute for Development and Social Initiatives “Viitorul”, posted on Facebook. The expert noted that the behavior of the Moldovan leu in 2019 was dissimilar to that of 2018. In the first half of 2018, it appreciated continuously and then started to depreciate. In 2019, the situation was completely different. The leu initially appreciated considerably and then depreciated during a number of months.
● FRIDAY, January 10
Enterprises affiliated to SA “Moldovagaz” to be reorganized
All the enterprises affiliated to SA “Moldovagaz” will be reorganized by merging them into one distribution enterprise. This is one of the priorities of SA “Moldovagaz” for 2020 that was presented in a broad working meeting that centered on the action plans of the company’s divisions. SA “Moldovagaz” Administration Board president Vadim Ceban said the reorganization of the gas transportation enterprises and the supplier “Moldovagaz” is a priority for this year. “The separation of transmission system operators was also planned for this year as this is a condition stipulated by law,” he stated.
Carriers must present vehicle inspection timetables by Feb. 1
The transport operators that provide interurban routes are to submit vehicle inspection timetables by February 1. Afterward, the vehicles that transport passengers will be classified according to comfort categories in three stages, until October 1. Minister of Economy and Infrastructure Anatolie Usatyi said the carriers that will not comply will be subject to inspections at the first stage, between February 1 and April 1. Iulian Postică, secretary of state at the Ministry of Economy, said one third of the vehicles are to be classified by April 1. The next two stages will last until June 1 and, respectively, October 1.
Foreign exchange reserves up over US$ 4m in a month
The foreign exchange reserves at the end of last year were US$3.059,63 billion, up US$4.09 million compared with November 29, 2019, when these totaled US$ 3.055,54 billion. The rise was due to the appreciation of the currencies included in the foreign exchange reserves against the US dollar (US$ 17.10m). Also, there were transferred loans and grants to the value of US$4.72 million in favor of the Ministry of Finance for investment projects.
Each third state-owned company in Moldova sustains losses, economist
Each third state-owned company in Moldova sustains losses and the situation worsens from year to year. The share of state-owned companies that made profit in 2018 declined to 60% from 62.6% in 2017, economist Diana Enachi stated in the program “15 Minutes of Economic Realism” that is produced by the Institute for Development and Social Initiatives “Viitorul” in partnership with RFE/RL’s Moldovan Service. The analysis of the economic-financial activity shows the net profit made by the state-owned companies decreased about ten times. A profit of 148.9 million lei was generally made in 2017, while in 2018 the net profit was of only 15.9 million lei. Among the companies that sustained losses are: Moldova’s Railways (73.1m lei), Mărculești International Airport (19.9m lei), Universul Publishing House (9.6m lei) and the Soil Protection and Financial Improvement Company (4m lei).
● SATURDAY, January 11
System for taxing donations modified
The donations in the form of money as from January 1, 2020 will be taxed within the limits in which they exceed the total amount of incomes earned in the course of the year, such as salaries, dividends, scholarships and pensions. Only the taxable income was taken into account until this year. The tax regime for donations of goods remained the same. the Ministry of Finance said that in accordance with the Tax Code, the property donated by a person is considered sold property. The income for tax purposes is assessed at its highest value of the adjusted value basis of the donated property or at its market price at the moment of donation.
Condominium co-owners associations exempted from income tax
The condominium co-owners associations are exempted from paying the income tax as from January 1, 2020, as it is provided in the budgetary-fiscal policy for this year. According to the Ministry of Finance, the measure is designed to ensure equal fiscal treatment towards condominium co-owners associations, similar to that used in the case of other noncommercial organizations. The Ministry of Finance said the Tax Code stipulates that the noncommercial organizations are exempted from paying the income tax. This provision does not apply to parties and other sociopolitical organizations, trade unions, employer associations, religious organizations and legal entities created by these, organizations founded by public authorities, cooperative businesses and other organizations whose founding and functioning are regulated by special laws.
Number of officially unemployed persons on the rise
Almost 3,700 persons registered with the National Employment Agency, being in search of a job, in the course of 2019. The unemployment figures were higher than in 2018. At the start of 2019, the figure of jobless persons stood at 27,000, but rose to over 31,000 towards the end of the year. Almost 60% of the unemployed were men.
Consumer prices go up
The annual inflation rate last December was 7.5% for the past 12 months (January - December 2019). The consumer price index was 100.9% on November 2019. According to the National Bureau of Statistics, the nearly 1% rise in the average consumer prices was due to the 1.6% increase in food prices, 0.6% increase in nonfood prices and 0.1% rise in the prices of services provided for the population.
