ECO-BUS WEEKLY DIGEST–August 5-12. Most important Economy & Business news by IPN
● TUESDAY, August 6
Prime minister: If savings allow us, we will try to reduce fiscal burden
“We are working now to eliminate all the corruption schemes established by the former regime for siphoning off public money. If savings accumulated following the elimination of these schemes suffice, we will try to reduce the tax burden for everybody”, stated Maia Sandu at a meeting of the National Confederation of Employers’ Organizations. The prime minister emphasized the authorities' intention to have clear and transparent rules that would provide employers investment security and stressed that economic development is a priority for the current government.
Key state budget information will be available online
Key information on revenues and expenditures from the state and local budgets can be accessed online, on a new web portal launched by the Ministry of Finance - buget.mf.gov.md. In a press conference held on August 6, Minister of Finance Natalia Gavrilița said that this portal allows easy budget data visualization. "Transparency is one of the basic principles of our government and this portal represents a step forward in making information on public money collection and spending more transparent," says Natalia Gavrilița.
Average salary in Transnistrian region increased
The average salary in the Transnistrian region increased by 8% in the first half of the year. Its level stands at 4,437 Transnistrian rubles (about 5,000 lei). The financial and IT sectors remain the highest paying. The regional press writes that in real terms, i.e. taking into account inflation, salaries grew by 5.3%. The rate of increase in salaries was different in different sectors of the economy. The level of growth depending on the sector of the economy ranged from 2.1% to 16.8%. The only industry where a decline was recorded in the first half of the year was forestry. In this area, salaries have decreased by an average of 3.4%, down to 2,129 Transnistrian rubles.
● WEDNESDAY, August 7
Vadim Brînzan: Moldova discusses three gas supply options
While Moldova has at present a single gas import contract with the Russian company Gazprom, three options to diversify gas supply are now being considered, said Minister of Economy Vadim Brînzan. "We work on three dimensions. The first is to either renegotiate the contract or have a two-year contract with Gazprom, in order to have time to finalize the Ungheni - Chișinău pipeline, which will be ready by March next year. We are working with our Romanian partners so as to speed up the process”, said Vadim Brânzan during TV8’s show "Cutia Neagra".
Minister of economy: System needs to be rid of corruption schemes
The system needs to be rid of toxic people and corruption schemes, and only after this is done can new projects be implemented, stated Minister of Economy Vadim Brînzan during TV8’s show "Cutia Neagra." "I have to rid the system of toxic people. Unfortunately, most of the time, that's my main occupation. I would like to wake up one day, go to work and, instead of hearing about another scheme, take care of the things that I really want to take care of”, said Vadim Brînzan.
More expensive bee honey this year
Acacia honey, a type of honey in high demand on the market, has been collected in smaller quantities as compared to last year because of the cold and rainy weather. Less honey means higher prices. Ion Maxim, president of the National Association of Beekeepers, told IPN that beekeepers sell wholesale honey at up to 80 lei a kilo if pollen content reaches 20% and at 60-65 lei per kilo if it contains less pollen. There is also a little less linden honey as compared to last year. The heavy rainfall followed by a shortage of rain has diminished the content and the amount of pollen. This year one kilo of wholesale linden honey costs 45 – 55 lei while last year -- 45-50 lei.
Metal Employers’ Association demands legislation changes to stimulate sector growth
The liberalization and de-monopolization of the market for ferrous and non-ferrous metals, as well as legislation changes meant to increase the dynamics in the area are the main requests addressed to the state decision-makers by the Metal Employers’ Association (APM). APM Chairman Valentin Eșanu addressed President Igor Dodon, Prime Minister Maia Sandu, Parliament Speaker Zinaida Greceanîi, Deputy Parliament Speaker Mihai Popșoi and Deputy Prime Minister Andrei Năstase, upon informing them about the setbacks on the market for ferrous and non-ferrous metals.
Foreigners coming to Moldova spend more than Moldovans returning home, survey
Foreign tourists coming to the Republic of Moldova spend over 23 thousand lei per visit, while Moldovans from the diaspora, spend slightly more than 16 thousand lei upon return. The data was collected via a survey conducted at the border, at the exit from the Republic of Moldova. The results were presented today by the National Association for Inbound Tourism. Dumitru Slonovschi, author of the study, said that the period of stay of foreigners caps at two weeks, while Moldovans stay for almost a month. The expenses incurred are largely for flights, accommodations, food and transportation.
Direct flight to Switzerland
The Government has approved a Regular Air Services Agreement with the Swiss Federal General Council, drafted in Bern on April 4, 2019. According to authorities, the Agreement will contribute to destination diversification from Chisinau International Airport. Moreover, it will facilitate Moldova’s access to west European air markets. Statistical data shows an increase in the number of passengers to this destination. In 2017, about 17,000 passengers traveled from Chisinau to Geneva, Zurich, Basel or Bern, all of them on connecting flights.
● THURSDAY, August 8
Official reserve assets on the rise in July
At the end of July official reserve assets totaled $ 2.952 billion, by $ 38.21 million more as compared to June 28, reported the National Bank of Moldova. The increase in official reserve assets was due to the net inflows related to the foreign currency reserve requirements of the licensed banks - $ 36.71 million, as well as to the net interventions on the internal currency market in the form of currency purchases - $ 23.04 million. Other factors include the registration of funds in favor of the Ministry of Finance received from the European Commission in the form of grants - $ 16.20 million, and the registration of credits and grants in favor of the Ministry of Finance for investment projects - $ 6.09 million.
Nine swine fever outbreaks: 100% fatality rate
Nine outbreaks of African swine fever have been reported in three districts of Moldova. 187 domestic pigs were slaughtered so far, and 8 other cases were detected in wild boar, Ela Malai, acting director of the Food Safety Agency (ANSA), told a news conference Thursday. The three districts are Nisporeni, Cahul (villages Roșu, Burlăceni, and Crihana Veche) and Cantemir. ANSA teams are on site taking the measures required by protocol.
Lack of public consultations is a guaranteed failure, Confederation of Employers
The representatives of the National Confederation of Employers of Moldova say that the drafting of any normative act and any modification with impact on the entrepreneurial activity should be consulted with those who are going to implement these provisions. During a press conference, the NCEM leadership stated that the launched initiatives have a common feature: the lack of public consultations. "Something characteristic for our society is being observed: the individual who has reached a management position often distances himself from his previous realities. And he believes that everything he would do is fair and favorable for this society. An eloquent example in this regard is the restructuring of the government, which was carried out by the previous executive and legislative. Following the central public authorities' reform, the number of ministries has been reduced, many of them being combined, having in mind the goal to lower administrative expenses”, said the president of the Confederation, Leonid Cerescu. According to him, the intention is good, yet the newly formed structures are often unable to solve multiple problems that arise in the private sector.
President’s Office to propose bill introducing business ombudsman
A draft law on the establishment of an entrepreneurs’ ombudsman will be developed by the President’s Office in collaboration with representatives of the business associations and business community. The bill will be submitted for consultations with all interested parties at the beginning of September, the President’s Office announced after public consultations on this subject. Mihai Bologan, vice president of the Small and Medium Enterprises Alliance, participating in public consultations, welcomes the initiative. According to him, there are many situations when companies face "unpleasant interactions with representatives of state institutions, such as inspections, requests for the issuance of a authorizations and not only". "The representatives of companies do not have a secure channel through which they would defend their interests in relation with the representatives of the state institutions. Thus, the creation of the Office of the Entrepreneurs’ Ombudsman is a necessity”, Mihai Bologan.
● FRIDAY, August 9
Natalia Gavriliță: Eradicating corruption schemes will increase budget revenue
The Minister of Finance, Natalia Gavriliță, said that if state-owned enterprises engage in corruption schemes or do not spend public procurement funds judiciously, then these amounts of money do not reach the state budget. According to the minister, the elimination of these schemes will increase revenues, yet the process is time consuming, because it involves the revision of contracts, government decisions and laws. "We, so that citizens understand, when we talk about ‘schemes’, we talk about the embezzlement of public money. That is, someone makes decisions, signs contracts and makes public procurement acquisitions that are clearly against the public interest and the budget interest and include multiple elements that need to be understood. I can offer ‘Chisinau Arena’, as an example, because Minister Brînzan has already talked about this so-called ‘public-private partnership’, which implies a contract that was concluded at the expense of the state, where the partnership, in fact, consists of public spending and private income,” said Natalia Gavriliță.
Ministry of Finance priorities put up for public debates
Measures to combat corruption, fiscal, customs and budgetary policies improvements, as well as the restart of relations with external partners, are the main priorities of the Ministry of Finance, as part of the Government Action Plan. These priorities have been discussed during public consultations held on August 8. "The document proposed for consultations will be improved and finalized after all suggestions are considered", said Minister of Finance Natalia Gavrilița.
Operators voluntarily declaring customs contraventions not to be held accountable
Importers can notify the customs body in writing in any customs contraventions existed before the initiation of subsequent inspections and thus avoid potential sanctions. This measure is included in a series of legislative amendments promoted by the customs authority. Adrian Morărescu, head of the Legal Control and Enforcement Directorate within the Customs Service, specified for IPN that the subsequent controls can be carried out in two ways: by a re-verification of customs declarations or by a post-customs audit.
Contradictory opinions on the cancellation of gambling fiscal facilities
The bill providing for the cancellation of tax facilities for the businesses in the gambling area is meant to bring fiscal equity. The authors of the legislative initiative say so. According to them, this reform isn’t against the business climate, but in the support of fiscal conditions. On the other hand, the representatives of "Moldova Lottery National" and partner company maintain the activity they have been carrying out brings revenue to the state budget. The new provisions establish taxes for lotteries, which would impede their development. These opinions were presented at the meeting of the Economic Press Club on Friday. MP Dumitru Alaiba, co-author of the legislative initiative, says that according to one of the new provisions, people who will win money at the lottery or sports betting will pay tax for the income exceeding 240 lei. In his opinion, the current exemption isn’t fair towards those who receive salaries, from which they pay taxes. However, those who were lucky enough to win the lottery are exempted from taxes.
Rains affected strawberry exports
Abundant rainfall in May and June damaged the quality of strawberry, affecting exports. Aneta Ganenco, president of the Moldovan Berries Association, told IPN that both field- and greenhouse-grown crops were affected. Due to above-average humidity levels, many strawberries rotted before they could be exported. On the domestic market, says Aneta Ganenco, the situation wasn’t any much better given “an invasion of berries from Ukraine, about which buyers were told they were of Moldovan origin”.
Government approves tax measures
Individuals earning more than 360,000 lei a year will not qualify for the 24,000 lei personal exemption. This and other fiscal measures have been approved by the Government at its Friday meeting. Finance Minister Natalia Gavriliță said this measure means that individuals with higher incomes will contribute more to the budget. In 2018, the number of people who earned more than 360,000 lei a year was 4,891. Also, people earning more than 30,000 a month will pay an additional tax of 240 lei. The overall expected effect is 14 million lei in additional revenue.
Cancellation of duty-free facilities approved
Companies licensed to carry out duty-free activities will no longer enjoy fiscal and customs facilities, under a proposed legislative amendment approved by the Government on Friday. As revealed earlier by prime minister Maia Sandu, and subsequently confirmed by the Security and Intelligence Service, about three-quarters of the goods marketed in these outlets were being imported illegally. Moreover, duty-free goods would be distributed to be marketed in other, non-duty-free shops across the country or exported to other countries.
● SATURDAY, August 10
Tax changes for goods transported via international postal services
The tax treatment applied to imported goods by means of international postal services is reviewed, according to a bill approved by the government. In particular, fiscal and customs facilities will only be applied to goods that do not exceed the threshold value of 200 euros and are not commercial in nature. Through these changes, a gradual adjustment to EU practices is sought, where the currently applied threshold value to the respective items is 22 euros. At the same time, Ukraine, a neighboring country, applies a 100 euros maximum.
The government approved the taxation of meal vouchers for social insurance
According to Minister of Finance Natalia Gavriliță, currently 30,000 employees each receive about 990 lei worth of meal vouchers per month. This amount is exempt from income taxation and contribution to social security and medical insurance funds. The minister added that, in April 2019, meal vouchers worth 27 million lei were issued, an increasing amount due to the number of increasing employers who accept this form of food expense coverage for employees. According to estimates, the monthly value of meal vouchers will reach 62 million lei at the end of 2020. Without taxation, the national public budget will be unable to collect 21 million lei per month.
