An 8% VAT rate, instead of the standard 20% one, will be applied to the entire chain of production and delivery of solid biofuel, as proposed by the draft 2017 Fiscal and Customs Policy, which is currently under public debate.

The measure will involve, among other, deliveries of raw materials, including all sorts of wastes, to produce solid biofuel, as well as deliveries of solid biofuel to produce heat and hot water.

In light of Moldova’s commitment to transposing EU legislation, in particular the European principle of promoting own sources of renewable energy, the Ministry of Finance says it is necessary to offer support to all the players in the field, engaged in both consumption and production of biofuel.

It is expected that the measure will ensure a continuous and constant growth of solid biofuel production and will stimulate consumption of homegrown fuel. Another estimated advantage is that the measure will cut state budget expenditure on VAT refunds.