The taxable income limit, annual personal exemption and exemption for maintained persons are to be adjusted to the rate of inflation of 5% forecast for the next year. The draft budgetary-fiscal policy for 2017 was proposed for public debates, IPN reports.

Thus, it is suggested that in 2017 the private individuals and individual entrepreneurs should pay an income tax of 7% of the annual taxable income that does not exceed 31,140 lei, as opposed to 29,640 lei at present, and 18% of the annual taxable income that is higher than this sum.  It is expected that the rise in the taxable income limit by 1,500 lei a year (or 125 lei a month) will leave by up to 165 lei a year in taxpayers’ pockets.

The Academy of Sciences of Moldova said that this limit is raised annually, but the increases are symbolic, especially in the context of the depreciation of the national currency and another rise, as symbolic, will not contribute to improved financial capacities of taxpayers and better relations between taxpayers and the Tax Service. It thus proposed that the tax rates should be 7% of the annual taxable income that does not exceed 50,000 lei and 18% of the annual taxable income that exceeds this sum.

The Ministry of Finance considers the measure is welcome, but, given that it will affect the amounts collected into the local budgets, it cannot be supported for now. If the proposal is accepted, the persons with annual incomes larger than 67,731 lei will pay a lower income tax, namely 2,074.6 lei for 2017, while those with annual incomes between 46,659 lei and 67,731 lei, respectively, will pay an income tax lower than 2,074.6 lei. The given measure favors especially the persons with medium and high incomes and has a significant negative impact on budget incomes (about 700 million lei).

It is projected that the personal exemption in 2017 will be increased from 10,128 lei to 10,620 lei, while the exemption for maintained persons – from 2,256 to 2,340 lei a year for every maintained person. In case of childhood invalids, the exemption will be raised from 10,128 lei a year to 10,620 lei. The exemption for the husband/wife who does not benefit from personal exemption will represent as much.

Proposals from the business community and civil society to the draft fiscal policy are expected until September 1 on wwwparticip.gov.md.