The worsening situation within the Moldovan economy is forcing the country’s authorities to “tighten their belts” even in the electoral year.
Marina Dragalin, RTA:
January holidays are traditionally replete with generous promises of politicians, especially when the next electoral period is following. The coming year is no exception. The New Year’s appeals of the Moldavian establishment to the people were tuned with optimism with a touch of election slogans.
The President Igor Dodon, for example, loudly promised to the citizens of the republic to make 2020 the year of restoration – which should become a kind of national project by analogy with the liberation of the “captured state” last year. “A project where every citizen will benefit, regardless of his political views. Recovery means that we will have priority in repairing roads, investing in the infrastructure of the country’s regions, creating new jobs, supporting retirees and raising wages, qualitive education and modern medicine,” the president said.
An excellent election program where everyone is “caught”. Unfortunately, the country’s economy got so weak recent years (the constant political instability and the outflow of the able-bodied population have done job) that Moldova itself is no longer able to do much. At least, the entire country’s planned infrastructural renaissance by Dodon is definitely not affordable. Given the current difficulties with macro-financial assistance from the European Unionresumption and the vague prospects of cooperation with the International Monetary Fund, at some point the major reconstruction of the infrastructure may stall due to a banal lack of funds in the accounts. It will obviously not be possible to manage exclusively with Russian loans andpay for the Moldovan’s leader ambitious plans.
But in addition to vast expenses for renovating the infrastructure, funds will require both: paying the second indexation of pensions, raising reliefs, payments, other promises the socialists made after the collapse of coalition with ACUMand full-time and standard cost items. For example,the coming year, Moldova is to pay 65.6 million lei only as membership dues and fees along with debts to international and regional organizations.
In addition, let’s not forget that sooner or later loans have to be returned, even if with small interest. For the Moldovan budget, which got into a deep red last year and continues to slide into a multi-billion-dollar debt hole right now, this is an almost impossible task. Judging by the measures taken by the Chicu government last year, the authorities are well aware of the fragility of the 2020 budget modeled by the three cabins. It is enough to see them not disdainingsuch scanty resources to fillit with.
Thus, starting from the new year in Moldova, all winnings in lotteries and sports sweepstakes exceeding 240 lei are subject to income tax in the amount of 12%. Citizens with high incomes, earning more than 360 thousand lei per year, did not go unnoticed – they will no longer receive personal exemption when paying income tax. Moldovans will have to fork out even when receiving parcels from abroad, if their value exceeds 200 euros. In addition, in the coming year, the opportunity to trade duty-free in the zone of arrival in the country was closed: now goods in stores, bars and restaurants will be taxed and liable to customs duties.
Another one, hardly last but resonant way of filling the Moldovan treasury is to increase the price for intercity vehiclestrips. Now public transport is classified by its comfort, and the price is formed not only considering the distance, but also the convenience of the vehicle. For a standard comfort categorytransport, the tariff per kilometer was increased by 25% from 48 to 60 bani, and for high-comfort buses, almost half – by 45% to 70 bani per km. In addition, despite the last yearscandals, the tax rate for the restaurant and hotel business nevertheless increased: from 10% to 20%.
These measures will not fundamentally change the situation in the economy, but they will certainly help scrape up additional funds for infrastructure projects so cherished by the new government. But the fact that in the electoral year Moldova is already entering with a number of unpopular decisions and increases in all kinds of payments, tariffs and taxes is clearly a bad sign that makes one seriously think about what the country is to face after the presidential election.
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