ECO-BUS WEEKLY DIGEST 19 - April 25. Most important Economy & Business news by IPN
● MONDAY, April 19
Legislative proposal to reduce natural gas tariffs
The President of Moldova Maia Sandu submitted to Parliament a draft law that enables to reduce the natural gas tariffs by eliminating unjustified costs in the amount of 150 million lei. The bill will take effect when it is passed by Parliament after being proposed for public consultations. On her Facebook page, President Sandu said the legislative proposal introduces amendments to Natural Gas Law No. 108/2016 and provides that the amortization costs that appeared as a result of the reassessment of assets will be excluded. The bill stipulates that the assets can be amortized only once throughout their life.
Construction of 2.8 MW Photovoltaic Park underway in Criuleni
The works to build a Photovoltaic Park with the capacity of 2.8 MW started in Criuleni district. According to the developers, the solar power plan will enable to generate electricity to satisfy the needs of public institutions in the district and will contribute to reducing carbon dioxide emissions by over 1,000 tonnes of CO2 annually. The value of the project is about €3.7 million, with the money being provided by the Government of the People’s Republic of China. Attending the event to open the building site, secretary of state at the Ministry of Economy and Infrastructure Mihail Lupașcu said that this project is unique for the Republic of Moldova by size and capacity. ‘The given project will contribute to achieving the objectives of the state policies in the energy and environmental sectors, to increasing the country’s energy security and the share of renewable energy in energy consumption and also to reducing greenhouse gas emissions,” he stated.
Grave things happen at Moldova’s Railways, MP
The deputy head of the Party “Dignity and Truth Platform” (PPPDA) Alexandru Slusari said that even if a commission of inquiry is working, serious things happen at the state-owned enterprise Moldova’s Railways. Most of the employees haven’t been paid salaries for four months already. Some of them resign, while others get ready for protests. Also, at the contest to choose the director of the enterprise, the Socialist leader Igor Dodon is coordinating the candidacy of a person who is featured in the SIS reports. Igor Dodon already gave instructions as to the person who should win the contest and current acting director of the enterprise Adrian Onceanu applied to take part in the contest as a reserve variant. In a press briefing, the MP said the enterprise’s debt now totals 837 million lei and the salary arrears come to 164 million lei of this sum. Alexandru Slusari reminded that the PPPDA considers the goal is to make this enterprise bankrupt by continuing the schemes of corruption in the absence of Government control. The subject should have been discussed by the Supreme Security Council long ago, but its examination has been put off for two times on the pretext that Adrian Onceanu didn’t come to the meeting.
What is more advantageous: mortgage or rent? NBM podcast
In the 1990s and 2000s, only the wealthy ones could think about the own home, but the decrease in the prices of real estate, the rise in the population’s incomes and promotion of the monetary policy by the National Bank, followed by the reduction in interests rates, led to the democratization of the real estate market. All these together made home rental be even higher than the monthly mortgage repayments in particular conditions, says the podcast “What is more advantageous: mortgage or rent?” that was published by the National Bank of Moldova. They earlier sold by about 14,000 apartments in Moldova annually, but in 2019 and 2020 the number of transactions rose to almost 30,000. Furthermore, most of the transactions were earlier performed with money from abroad, but now the apartments are purchased with money gained in the country, said economist Veceslav Ioniță.
● TUESDAY, April 20
Requests to unlock sale of honey by nonregistered beekeepers
The Association of Exporters of Beekeeping Products of Moldova (AEPAM) and the National Beekeepers Association of the Republic of Moldova (ANARM) ask to unlock the sale of honey by beekeepers that are not registered as business entities. AEPAM president Vasile Dolghieru and ANARM president Ion Maxim sent a public letter to Parliament, the parliamentary commission on agriculture and food industry, the Ministry of Agriculture, Regional Development and Environment and the National Food Safety Agency. The letter notes that by discriminating against the beekeepers that are not registered as business entities, the current legislation on beekeeping places obstacles to the sale of honey on the domestic market and to its export and even to the development of the whole beekeeping sector. Given that the new harvest will soon appear, the AEPAM sand ANARM ask for immediate actions on the part of the responsible state institutions.
Banking system of Moldova should more efficiently use liquidity, study
The national banking system should more efficiently use liquidity, said Dumitru Vicol, associate analyst of the Institute for European Policies and Reforms (IPRE) , strategist on emerging markets in London, and IPRE vice director Stanislav Giletski. In an analytical note, the authors note that in Moldova, as in other countries of the region, three is an abundance of liquidity. An explanation is the combination of the rigorous acceptance criteria and the lack of demand for solid loans. Furthermore, the lack of alternatives for saving outside bank depots also contributes to this structural problem, said the experts. Excessive liquidity represents the banking system resources above the mandatory reserves that are not used. This indicator is crucial for determining the banking system’s capacity to lend to the real sector and public sector. The credit impulse, which is a reference point for the annual rise in loans provided to the private sector per GDP, for Moldova was slightly under 0 in the fourth quarter of 2020.
Moldova to implement IT solution to prevent money laundering risks
For the first time, Moldova will implement, with the support of USAID, an integrated IT solution designed to automate and streamline the monitoring processes of money laundering risks and the transparency of ownership of supervised banks. The main functionalities of the solution were presented in an online event hosted by the National Bank of Moldova. In his opening remarks, NBM Governor Octavian Armașu said the implementation of the new IT solution comes in the context of the reforms done the past few years in the national banking system to support the economic development of the country, for the benefit of the whole society. “The close monitoring of the banking system, identification and assessment of inherent risks and implementation of measures to mitigate these are not only important tasks, but also real challenges. But the development of the financial market is more dynamic and needs prompter approaches on the part of the supervisor,” said Octavian Armașu.
● WEDNESDAY, April 21
Igor Grosu about compensation of electricity tariffs: This is an electoral gift that costs half a billion lei
The acting president of the Party of Action and Solidarity (PAS) Igor Grosu said the PSRM’s initiative to compensate the electric power tariffs for all the domestic consumers during the state of emergency is populist and represents an electoral gift. He anticipates the PSRM could take money from the foreign exchange reserves of the National Bank of Moldova for covering the related costs. The bill to compensate the electricity tariffs was passed by the PSRM-Shor coalition after giving it a first reading a week ago. Igor Grosu is skeptical about the chances of this bill being adopted in the final reading.
Markets and shopping centers will continue working according to shortened program
The authorities decided to extend the provisions concerning the shortening of the work program for markets and shopping centers. Under a decision taken by the Commission for Executional Situations, the agrifood and nonfood markets will work between 7am and 3pm, while the shopping centers and specialized retail outlets between 7am and 6pm. With the expiry of the previous provisions, both the Central Market and the Fowl Market situated on Cărbunarilor St in Chisinau were to return to the ordinary program, from 6am until 6pm. The acting director of the Central Market Ion Pîntea said they will comply with the Commission’s decision and the market will work until 3pm, as until now.
Economy Ministry about new asphalt standards: Progress started to be made
Representatives of the Ministry of Economy and Infrastructure said that most of the entrepreneurs meet the new European requirements and standards and supply end-users with building materials and products that are of a high quality and safe. According to them, progress started to be made. The issue was discussed in the context of the municipality’s statements about the business entities’ unwillingness to supply asphalt that meets the new standards so as to perform current repair works on the streets of Chisinau. Mihail Lupașcu, secretary of state at the Ministry, in a news conference said the Government decision to approve the new requirements took effect in August 2018. Under this, the compliance and quality of the products that are placed on the market is ensured by implementing over 400 European standards.
● THURSDAY, April 22
60% of taxes for natural resources will remain in mayor’s offices
A portion of 60% of the taxes for natural resources will remain in the budgets of villages and towns, except for the municipalities of Bălți and Chisinau. The other 40% will be transferred to the district budgets that now include a 100% tax for natural resources. This is provided in a bill that was given a first reading by Parliament. Bill author, PPPDA MP Inga Grigoriu, said the goal is to strengthen the financial autonomy of the local public authorities of the first level by increasing their budget revenues. Under the current provisions, the payers transfer the taxes for natural resources to the local budget of the second level. The current method of paying the taxes for natural resources is deficient and negatively affects the budgets of the local authorities of the first level and undermines local financial and fiscal autonomy in Moldova.
CNAS asks to swiftly present IPC 21 reports
The National House of Social Insurance (CNAS) calls on employers to present the IPC 21 reports as swiftly as possible so as not to affect the social rights of insured persons, especially the allowance for temporary incapacity for work. The date for presenting the IPC 21 report is set by law for payers of contributions to the state social insurance budget - the 25th day of the next month. The business entities primarily meet the time limit, but not all of them bear in mind that table No. 2 of the IPC 21 report contains information based on which the social welfare, pensions and allowances are calculated.
Public procurement procedures are planned defectively, AGER
The public procurement procedures in October 2020 – March 2021 were planned defectively. This resulted in reduced efficiency procurement and wasting of public funds. The normative documents concerning public procurement for managing the COVID-19 pandemic generated reduced transparency and a rise in the amount of public money used outside the transparent procurement system. The conclusions were presented in a roundtable meeting entitled “Legal abuses in Public Procurement during the Pandemic”, which was staged by the Association for Efficient and Responsible Governance (AGER). According to AGER, there are no mechanisms for executing the decisions of the National Dispute Resolution Agency. Some of the contracting authorities initiate repeated public procurement procedures with the same object after filing challenges to the Agency. The competition within the public procurement procedures is limited by applying improper procedures or by adjusting the technical specifications. There is no efficient control and the procurement-related violations are not penalized. The public procurement contracts are assigned to economic operators that submit noncompliant documents. Civic society continues to have insufficient instruments for influencing and stopping the illegal procedures.
Parliament adopts measures to support microenterprises during pandemic
The period for submitting tax returns and reports and for fulfilling the obligations to pay taxes and other ditties will be extended by 20 workdays in the case of microenterprises. The measure refers to cases when the enterprise managers or another empowered person are on medical leave in connection with treatment for COVID-19. The support measures were passed by Parliament. The bill was submitted by PAS MP Radu Marian as a legislative initiative. According to him, the bill was drafted as a result of a public petition signed by almost 3,000 persons, among whom were accountants and managers of enterprises.
● FRIDAY, April 23
National agrifood producers will be able to easier sell goods in supermarkets
Parliament supports the national agrifood producers. In the April 22 sitting, the MPs gave a second reading to a bill to amend the law on domestic trade and the Contravention Code of the Republic of Moldova. The bill provides for the capping to 10% of the supplier’s selling price of the discounts offered by this to the trader for selling food products. The marketing and advertising activities will be an exception. A time limit of 60 days will be set per product featured in marketing and advertising activities during a year. The trader or supplier that will violate the discount capping norms will face a fine of 2,500 to 5,000 lei in the case of private individuals and of 10,000 to 20,000 lei in the case of legal entities.
Compensations for electricity for April and May given final reading
Parliament adopted in the final reading a bill that allows for the provisions of compensations for electrical energy for April and May to household users, in the amount of 428 lei, even if the Government’s appraisal of the draft law was absent. The Socialist MPs, who drafted the bill, said these calculations derive from the average consumption of electricity in February and March. The compensations for power will be paid in two equal parts – until May 25 and until June 25. Under the bill, the Ministry of Finance will allocate the necessary funds to the account of the electric power supplier, which will distribute the money to the personal accounts (NLC) of the household users (private individuals).
NBM announces launch of implementation of instant payments scheme
On the 15th anniversary of the launch of the Automated Interbank Payment System of the National Bank of Moldova, the implementation of this instant payment scheme was launched. This is a common national platform for processing payments that brings a number of benefits to consumers and providers of payment services. This way, instant or real-time payments will be made nonstop with immediate final settlement and this will make the instant reuse of funds received by beneficiaries possible. The NBM said the putting of the system into operation represents an important step in the creation of modern payment infrastructure. The system’s anniversary coincides with the launch of a new stage in the development of the national payment system.
MPs adopt measures to support hospitality industry
The VAT rate for food products and/or drinks will be reduced to 6% with some exceptions. A bill to introduce measures to support the companies operating in the hospitality industry during the state of emergency and the state of public health emergency was given two readings on April 23. The document stipulates exceptions for alcoholic products, preparations accompanied by related services that would enable the immediate consumption of these. Bill authors, MPs of the Shor Party, said a special taxation regime for business entities of the hospitality industry is needed following multiple restrictions imposed on these companies that generated enormous losses, salary cuts and layoffs.
