ECO-BUS WEEKLY DIGEST–December 30-January 5. Most important Economy & Business news by IPN
● MONDAY, December 30
Modification of gas transportation tariffs will not affect end users
The end users will not be affected by the rise in the gas transportation tariffs. Moldovatransgaz assures the modification of the natural gas transportation tariff that was proposed for examination in last week’s meeting of the National Agency for Energy Regulation (NAER) will not lead to a rise in the natural gas price for end users in Moldova. In a press release, the company said the current tariff for the provision of the natural gas transportation service is 32.32 lei/1000 m3. The given tariff was calculated depending on the total volume of natural gas transported to Moldova (19.948,45bn m3), including for the consumers of the Republic of Moldova (997,613m m3) and the volume of transited natural gas (18.950,84bn m3). In 2019, the volume of natural gas transited through Moldova decreased considerably: by 88.9% (reverse flow regime) and by 93.5% (classical regime).
Freedom of movement in Security Zone agreed as priority in settlement process
The freedom of movement in the Security Zone and guaranteeing of human rights are key in the negotiation process and in the process of promoting the reintegration policies. The priorities were approved in the meeting of the governmental commission for reintegration. Prime Minister Ion Chicu said the commission hadn’t been convoked for over a year and this is a serious omission. “The country’s reintegration is essential and I ask you to ensure the efficient functioning of the sector working groups and not to allow the processes to be mimicked,” said the Premier, addressing the commission members. According to the executive’s press service, three priorities were agreed in the settlement process and in the promotion of reintegration policies, namely the extension of public services for the inhabitants of the Transnistrian region, joint control at the Moldovan-Ukrainian border on the Transnistrian segment (Kuchurgan – Pervomaisc), and the measures to support trade between the sides and to promote exports. Emphasis will be placed on some of the infrastructure projects, such as the rehabilitation of the Chisinau – Odessa road, including the Gura Bykului- Bychok bridge.
● TUESDAY, December 31
Rise in quotations of leu points to structural dysfunctionality, expert
The exchange rate of the national currency against the currencies of the country’s main commercial partners went up this year as well. Economic expert Viorel Gîrbu stated for Infodebit that the national currency has appreciated gradually since 2016. This points not to the economic power of the country, but rather to structural dysfunctionality. The expert told IPN that the quotations of the national currency can influence the volume of foreign commercial exchanges and their structure. The appreciation of the national currency against the currencies of the country’s main commercial partners is one of the factors that diminish the attractiveness of Moldova’s exports and, implicitly, the development potential of the national economy. Among the factors that affected the attractiveness of exports during the first ten months of this year is the fact that the deficit in the foreign trade with the EU member states rose by 6.4%. Exports to Romania fell by 0.7%.
Moldovagaz and Gazprom sign agreement on supply of gas
Moldovagaz and Russia’s gas giant Gazprom signed an agreement that extends the period of validity of the current contracts until December 31, 2020. In a press release, Moldovagaz said the sides signed additional agreements to the contract for the supply of natural gas to Moldova for 2007-2019 and to the contract for the transition of natural gas via Moldova for 2011-2019. Consequently, the same European formula for setting the purchase price of gas for end users in Moldova, based on the average arithmetic value of the selling price of natural gas by Gazprom to the European countries and the quotations of oil products, will be applied in the period. The other conditions for the supply and transportation of natural gas will also remain unchanged.
● FRIDAY, January 3
Women occupy only 31% of posts in ICT sector
The women are underrepresented in the information and communication technology (ICT) sector of Moldova. They occupy only 31% of the posts in this sector and only 19% of the digital jobs. Also, they hold posts that are paid less and require lower qualifications. According to the National Bureau of Statistics, the gender pay gap in the ICT sector is the widest in the national economy and in 2017 reached 33%. The employees in the ICT sector represent 3.6% of the total number of salary earners, coming to 25,700 persons. Half of ten ICT sector employees work in information technology, two in electronic communications and three in dispatching, trade, services and the ICT industry. Some 61% of ten ICT sector employees are younger than 35, 24% are aged between 36 and 50 and over 15% are older than 51. Most of the persons working in this sector have higher education.
Annual revenues higher than 360,000 lei no longer subject to exemptions
The taxpayers who do not perform entrepreneurial activities and have an annual income higher than 360,000 lei from taxable sources will no longer be entitled to the personal exemption set annually. This is provided in a draft decision that was approved by the Government on January 3. Minister of Finance Sergey Pușcuța, Deputy Prime Minister, said the draft decision also stipulates changes to the Tax Code, concerning the application of the general tax regime to capital growth in the case of business entities and the taxing of 50% of the capital growth in the case of private individuals. “In connection with the launch of new foreign assistance projects in Moldova, it was proposed updating the list of projects eligible for the tax and customs concessions stipulated in Government decision No.246 of 2010,” stated the minister.
● SATURDAY, January 4
Local taxes to be calculated and collected electronically
The process of calculating and collecting local taxes applying to private individuals who weren’t registered as entrepreneurs by the Local Taxes Service will be simplified and automated by implementing a new information system. With the assistance of this, the fulfillment of fiscal obligations related to local taxes will be monitored electronically, IPN reports, quoting a Government decision. According to Deputy Prime Minister Sergey Pușcuța, Minister of Finance, the goal of implementing the given automated information system is to optimize the monitoring of the honoring of fiscal obligation and the process of calculating and paying local taxes. This will enable to simplify and automate the whole process and will ensure the checking of the quality of the tax calculation process.
Simplified tax regime for collectors of agricultural products in force
The simplified tax regime for the collectors of agricultural products, especially fruit and walnuts, took effect on January 1, 2020. This is a special tax regime for registration and work intended for private individuals who want to purchase agricultural products from people and sell them later to business entities. In the January 3 meeting of the Cabinet, Deputy Prime Minister Sergey Pușcuța, Minister of Finance, said that in accordance with the changes that came into force on January 1, any citizen can perform such activities after registering them with the State Tax Service under a simplified regime. According to him, a simplified method of documenting transactions for buying agricultural products, for calculating and paying taxes into the budget is used in this case. The tax represents 5% of the value of the bought agricultural products that will be later sold to business entities.
Moldova’s gross external debt at US$ 7.316,99bn
The gross external debt of Moldova decreased by 2% compared with the start of 2019 and was US$ 7.316,99 billion on September 30 last year. This was 61.9% of the GDP, IPN reports, with reference to the National Bank of Moldova. The public and publicly guaranteed external debt represented 25.6% of the external debt, totaling US$1.872,70 billion. The nonguaranteed external private debt came to US$ 5.444,29 billion, down 1.5% on December 31, 2018. According to the central bank, the long-term debt represented 71.8% of the gross external debt. This totaled US$5.250,26 billion on September 30, 2019, down 0.9% on the start of 2019. The nonfinancial companies accounted for 40.4% of the external debt, while the intragroup loans within direct investments (without sector distribution), including the debts for the imported natural gas – 26.8%.
Balance of payments current account deficit on the rise in 2019
The current account deficit of the balance of payments of Moldova in the first nine months of last year continued to grow. But the components of the current account had a non-uniform development, the dynamics in the third quarter of the year being different from those in the previous quarters. According to the National Bank of Moldova, even if the balance of foreign trade in goods in January – September 2019 as usual made a negative contribution to the current account, it improved in the third quarter of the year owing to the more accelerated rise in exports of goods compared with imports. Despite the unfavorable evolution of prices of exported goods (-5.1%, -4.3% and -5.1% in first three quarters of 2019), exports rose in value owing to the increase in volumes (+13.8%, +3.1% and +8.7%). From geographical viewpoint, exports of goods to the traditional markets – the EU and the CIS – diminished compared with January – September 2018 (-3.7% and -1.6%), but to other markets rose considerably (+49.1%).
Commission on payments with cards through Mpay reduced as of Jan. 1
The commission levied from legal entities for making payments through the government e-payment gateway #Mpay with bank cards was decreased from 1.5% to 0.5% of the value of the transaction as of January 1, 2020. The Electronic Governance Agency said the commission for private individuals since the MPay service was launched in September 2013 has been paid by the Ministry of Finance. As of January 1 this year, the Ministry of Finance earmarks a smaller amount for covering the payments made by private individuals with cards through MPay and consequently can use the saved resources for other priority initiatives. The private individuals and legal entities can use the government electronic payment portal mpay.gov.md to pay for over 250 public and private services with bank cards, through internet banking and in cash.
