Shadow economy is Moldovan economy's black hole, IMF official

The shadow economy is the black hole of Moldovan economy, stated Nikolay Gueorguiev, the head of the International Monetary Fund’s Mission to Moldova, at a press briefing after a meeting with union representatives, Info-Prim Neo reports. Nikolay Gueorguiev said that IMF team provided technical assistance to the State Fiscal Service in order to solve the issue of shadow economy and fight against ghost companies that don’t pay the VAT. The assistance also concerns the application of indirect methods for estimating the income of individuals. Asked about ways to increase wages in Moldova, Nikolay Gueorguiev said that the best way is to stimulate the economy. The head of the IMF mission added that a reform in the pension system was needed. IMF was discussing the issue with the Moldovan Government. However, Nikolay Gueorguiev remarked that it was too soon to talk about results. Head of the National Confederation of Unions of Moldova Oleg Budza said that during the meeting with IMF representatives, they discussed about the low wages that cause social instability and mass emigration. “More than 15 billion lei circulate in the shadow economy and this money must be brought into transparency. Welfare benefits, wages and pensions of Moldovans are hidden in these billions. The pension system must be changed as well. We are categorically against the equality of retirement age for men and women”, said Budza. The unions’ leader also noted that the employers’ representatives quit the negotiations because the unions didn’t accept the formula for the distribution of the wage-earner’s contribution to the state budget proposed by employers’ associations.