ECO-BUS WEEKLY DIGEST February 24-March 1. Most important Economy & Business news by IPN
● MONDAY, February 24
Standards concerning packing, labeling and transportation of meat products
The authorities are preparing standards regarding the quality for packing, labeling and transportation of meat cans, sausages, salamis and other meat products. A draft decision to this effect wad discussed in a recent meeting of officials in charge. Tatiana Nistorică, secretary of state at the Ministry of Agriculture, Regional Development and Environment, said that quality standards existed earlier too, but they were called technical regulations concerning meat products. Now that the legislation is adjusted to the EU’s, the name was changed.
Simplest form of keeping savings at bank is in checking accounts
Savings are the sum of money that remains after all the personal consumption costs are deducted from the incomes earned in a definite period of time. This money can be kept at home or in the wallet, but it is more sensible to keep them in banks. The simplest form of keeping savings at a commercial bank is in checking accounts. The information is published by the National Bank of Moldova within the information campaign carried out together with the National Commission for Financial Markets as part of the financial education project “Learn. Give Sense to Money”. When a person accumulates substantial reserves of money, the savings can be used as investments. The national financial market has a limited number of available savings or investment instruments, but the related aspects and risks should be known.
● TUESDAY, February 25
Even if pays increased during last few years, they remain very low, study
Even if the salaries, at least the declared ones, increased to a particular extent during the last few years, they continue to be very low and remain at the core of many problems. Owing to the very low incomes and the greater intensity of work, the employees feel wronged in the relations with employers and the government and confidence that things can improve considerably is at a very low level, shows a survey of the situation of salary earners in the Republic of Moldova. The research authors said the executive should stimulate the rise in pays by faster augmenting the minimum salary, by raising salaries in the public sector and by making much more efficient efforts to legalize salary incomes. The study presented on February 25 was carried out by the Friedrich Ebert Foundation (FES) in partnership with Syndex Romania. Ana Mihailov, program coordinator at the FES, said the study provides a general picture. “As regards the economic development, during the past few years we have more often heard such expressions as the improvement of the business climate and investment climate, attraction of director or foreign investment, tax concessions. These are uncontestably important factors for the economic development, but we simultaneously hear less about another important factor, such as work and labor productivity,” stated Ana Mihailov.
Women in 2019 experienced greatest salary loss during last six years
The pay gap in Moldova in 2019 was 14.4%, marking the biggest annual financial loss for women during the last six years, of over 14,000 lei. The data were presented by the Partnership for Development Center (PDC) in connection with the Equal Pay Day that is celebrated on February 24. Alina Andronache, specialist in advocacy and communication at the PDC, in a news conference said a woman had to work for 36 days more since the start of the year to reach the pay of a man last year. The gender gap in old-age pensions was also significant last year – of 21.6% to the detriment of women, up 4 percentage points on 2019. All these discrepancies lead to enormous financial losses for women.
Socialists present initiatives on agriculture, call on producers to export to Russia
Socialist MP Mihail Paciu told a news conference that the producers are expected to file applications for developing the export of fruit to the Russian Federation. According to the MP, of the over 300 Moldovan exporting companies, 250 export fruit to Russia. “In 2014-2015, there were 129 Moldovan companies that were banned access to the Russian market. Owing to the efforts made by the President of the Republic of Moldova Igor Dodon, these companies can export goods to Russia again. Moreover, the number of exporting companies during the last four-five years rose from 129 to 258,” stated the MP.
● WEDNESDAY, February 26
Annual illicit financial flows come to US$1.2bn, economist
The annual illicit financial flows amount to US$1.2 billion, but in some years the sum is by 60% higher than the estimates. This money fuel what underdevelopment of the country means. During 20 years, these flows in Moldova came to US$15-20 billion. The illicit financial flows were determined without taking into account the trafficking in arms, drugs, human beings and the funds stolen from the banking system, economist of the Institute for Development and Social Initiative “Viitorul” Veaceslav Ioniță as saying. The program is produced by “Viitorul” in partnership with RFE/RL’s Moldovan Service. The economist noted that the illicit financial flows are obtained by four schemes. Half of the sum of US$1.2 billion comes from underestimated imports. This scheme enables US$600-700 million to enter Moldova annually. This money reaches the country’s underground economy. The second scheme consists in the illegal taking of money out of the country by overestimating imports. US$350-400 million is annually taken out of the country by this scheme. This money leaves and stops in tax heavens. A part of the money comes back to the country in the form of foreign investments from tax heavens. This scheme involves state-owned companies and in this case it is not only tax evasion, but also appropriation of public funds.
Moratorium on citizenship by investment extended
The moratorium on the receipt of new applications for obtaining Moldovan citizenship by investment was extended until January 1, 2021. A draft decision to this effect was approved by the Cabinet on February 26. Minister of Economy and Infrastructure Anatol Usatyi said the bill on the initiation of a new moratorium was drafted to offer more time for thoroughly examining this subject and for taking a final decision concerning the citizenship by investment program.
● THURSDAY, February 27
Japan lends over US$18m for modernizing agricultural machinery
Moldova will take out a Japanese preferential loan to the value of US$ 18.6 million for modernizing the agricultural machinery and equipment. A draft decision on the initiation of negotiations on the draft lending agreement between the Government of Moldova and the Japan International Cooperation Agency for implementing the project was approved in the February 26 meeting of the Cabinet. Minister of Agriculture, Regional Development and Environment Ion Perju said the loan is repayable in 40 years at a fixed interest rate of 0.1% for buying agricultural machinery and equipment and of 0.01% for consultancy services. The grace period is 12 years.
State Tax Service launches Taxpayer’s Personal Cabinet
The State Tax Service on March 2 will pilot a new electronic service called the Taxpayer’s Personal Cabinet. This is designed to ensure the automated connection of taxpayers to electronic tax services. Since its launch, the public authority managers, legal entities and private individuals that carry out entrepreneurial activities can obtain in an automated way access to electronic tax services. They must sign in through MPass within the automated information system Taxpayer’s Personal Cabinet on www.sfs.md and put the digital signature on the regulations concerning the method of using electronic tax services through the system.
Chisinau municipality intends to purchase 100 new buses this year
A package of documents for buying a consignment of 100 buses this year was presented by the Chisinau City Hall to the municipal councilors on February 27. According to mayor Ion Ceban, the consignment is to be bought from a bus factory of Belarus. These have engines of German make, automatic gearbox, low ceiling, modern equipment and are the most competitive on the international market by price. A unit of transport costs about €120,000. If the buses are assembled in Chisinau, the price will be by 7-10% lower, plus the exemption from VAT.
One more director named at NAER
Parliament appointed Violina Șpac, who obtained the highest cumulative score in the selection contest, as director of the Administration Board of the National Agency for Energy Regulation (NAER) for a six-year term. PPPDA MP Stela Macari said the draft decision on the appointment of Violina Șpac should not be adopted as the score of the candidates who took part in the contest was calculated in the absence of the members of the commission on economy, budget and finance and according to unclear methods.
● FRIDAY, February 28
Central bank to provide loans to Deposit Guarantee Fund
The National Bank of Moldova will have the right to provide loans to the Bank Deposit Guarantee Fund if this will have insufficient resources to honor the guaranteed deposits. Parliament gave a final reading to a bill to this effect on February 27. Under the bill, the lending conditions, including the interest rate on loans, will be agreed by the Executive Board of the National Bank of Moldova.
After Chicu Government’s 100 days in office, frauds in Moldova were resumed, opinions
After 100 days of the appointment of the Government led by Prime Minister Ion Chicu, the schemes of fraud that were suspended for a period were resumed in Moldova, consider ex-minister of finance Veaceslav Negruța, ex-chief of the Border Police Rosian Vasiloi, and the president of the Metal Employers Association Valentin Eșanu. Rosian Vasiloi noted that he saw no developments during the 100-day period. Nothing new happened and only the projects that are supported by the international partners were continued.
Charge on heat supplied by Apă-Canal Chisinau increased
The consumers that are supplied with heat by Apă-Canal Chisinau will pay more for this service. The National Agency for Energy Regulation on February 28 decided that the charge will be 1,132 lei per gigacalorie, up 43 lei. Ilie Trifan, head of the company’s Energy Department, said the new charge is intended for 58 apartment buildings, six medical institutions, four business entities, three schools, two kindergartens and a cultural institution. These are all situated near the airport, in Codru town and on Costiujeni St.
More people submit tax returns in electronic form
The number of fiscal documents presented to the State Tax Service through the Electronic Statement information system by private individuals last year rose over two times against 2018. According to the Center of Information Technology in Finance, the figure in 2019 stood at about 37,200. Statistics of the Center, which manages the information system of the State Tax Service, show that the number of fiscal documents submitted to the Service through the Electronic System by legal entities increased by 9.6% on 2018, to over 1.692 million.
Bill on new moratorium on citizenship by investment given first reading
Parliament gave a first reading to the bill to institute a new moratorium on citizenship by investment until January 1, 2021. Iuliana Drăgălin, secretary of state at the Ministry of Economy and Infrastructure, stated in Parliament that the new moratorium will enable to examine this subject from all aspects and to take a final decision concerning the citizenship by investment program. In the answers and responses session, a representative of the Ministry informed that only one application for obtaining citizenship by investment was filed in the period between February 20, when the previous moratorium expired, and until February 28. This was submitted by an Irish citizen who works in the IT sector.
Trade between Romania and Moldova at over US$2.2bn last year
Trade between Romania and the Republic of Moldova in 2019 came to over US$2.2 billion. Romania’s exports totaled US$1.3 billion, while imports from Moldova added up to US$831.9 million, the Embassy of Romania in Chisinau stated, making reference to Romanian statistical data. Romania exported to Moldova mainly mineral products, machines, electrical appliances, chemical products. Also, Romania imported from Moldova machines, electrical appliances, vegetal products, common metals and metal products, textiles and textile articles.
● SATURDAY, February 29
IT entrepreneur: Active labor force leaves rapidly Moldova
The Government of the Republic of Moldova, the Ministry of Economy and the Ministry of Finance are taking steps aimed at easing the doing of business in Moldova. However, according to IT entrepreneur Veaceslav Kunev, the process is too slow and the active labor force meanwhile leaves Moldova at a high speed. According to Veaceslav Kunev, owing to the obstacles faced after starting businesses, the young people swiftly give up and look for alternatives outside the country.
Trade unions say salary arrears amount to over 20m lei
The salary arrears currently total over 20 million lei. These were accumulated at a number of national enterprises and institutions during the last few years, says representatives of the National Confederation of Trade Unions of Moldova, who consider that the delayed payment of salaries seriously affects the rights of salary earners. The subject was discussed in the first meeting of the national commission for collective consultations and negotiations held this year. The representatives of trade unions said besides the fact that hundreds or even thousands of salary earners do not get the deserved pays, the employees also do not receive social insurance contributions and this negatively influences the stability of pensions.
Employers accept risk of salaries “in envelope” in return for immediate gains
In search of additional profit, the employers are ready to pay a part of the salary “in envelope”. The tax evasion on salaries is consequently especially large in the Republic of Moldova. The state mechanisms for counteracting this phenomenon, such as tax inspections, penalties and the minimum salary, are not very efficient and the business community accepts the risk in return for immediate financial gains. In such conditions, the firms that pay salaries illegally are disadvantaged from competitive viewpoint, especially in sectors where the salary costs are decisive for winning contracts, like the building sector, for example, shows a study carried out by the Friedrich Ebert Foundation in partnership with Syndex Romania. According to the study, as the salaries are very low, the employees are ready to accept a modest raise if they get the pays “in envelope”. The distrust in the public medical and social protection systems explain the very low level of voluntary fiscal compliances. The lack of collective contracts at enterprise level and the very reduced negotiation power of employees only contribute to such a state of affairs.
