Economy minister optimistic of reintroduction of flat corporate tax

The reintroduction of the 10% flat-rate corporate income tax in 2012 will benefit the process of attracting investment into Moldova, believes Economy Minister Valeriu Lazar. “A tax of 10% levied on corporate profits is not so high after all and it will be reintroduced, as we announced earlier, from 2012, that is, the period when the economy is expected to recover from the downturn”, said Lazar. But he added: “Fiscal issues are not the main criterion when weighing an investment opportunity. If we prioritize criteria, then the first thing to consider in determining an investment option would be political and macroeconomic stability, followed by access to markets, predictability of the legal framework, operating costs. Here we still have some advantages compared to other countries in the region”. Once reintroduced, the flat corporate tax will be transferred to the local budgets as many potential investors think that larger local returns could help authorities spend more on rehabilitation of the infrastructure, which would in turn benefit investment, said Lazar. In spite of the 'flatness', fiscal incentives will be in place for certain companies, e.g. for those which will invest large amounts in rural areas. Anticipating the 2010 Moldova Business Week later this month, Lazar spoke about measures that the government intends to undertake to attract investment. These include a lower degree of bureaucracy in contacts between businessmen and the governmental agencies responsible for licensing, and the opening of 5 industrial parks in the near future.