Opinion: “PAS Is Emptying Moldovans’ Pockets to Fund the Army and Bureaucracy”

Parliament voted in the first reading to pass a controversial tax reform bill, through which the ruling regime intends to rob the public and businesses of more than 5 billion lei annually. This money will come in very handy given the plans to further increase defense spending and the need to pay more and more for the bloated bureaucratic apparatus

Semyon ALBU, RTA: I don’t think it came as a surprise to anyone that yesterday the ruling party’s lawmakers didn’t hesitate for a moment to vote in favor of the so-called “tax reform” bill. It’s fair to say that 54 members of parliament yesterday became accomplices in embezzlement on a particularly large scale, since they decided to rob our people of a hefty sum of no less than five billion lei – at least, that’s the profit they estimated from the tax reforms. Of course, it is hard to feel much sympathy for that segment of our society which, in full possession of its faculties, voted last year to prolong the travelling circus known as “PAS’ good times”. As the saying goes, they got exactly what they fought for. Nevertheless, the majority of our citizens, at least those living inside the republic, tried to choose a different course for Moldova, yet they will now suffer alongside the adherents of the “yellow” government. Officials are not exactly hiding the fact, nor would it make much sense for them to do so, that those very billions are ultimately going to come largely out of ordinary people’s pockets. In fact, the answer is probably “all of it.” Surely no one seriously believes that a business, say a restaurant, whose VAT has been increased by half will simply start operating at a loss or on razor-thin margins. Naturally, it will pass the additional costs on to its customers. Perhaps such a development can only be described as inevitable. My colleagues and I have repeatedly laid out in plain terms how, over the past five years, the ruling regime has effectively destroyed the national economy and public finances. If we were once able to function with a degree of autonomy and only limited external support, in recent years we have turned into outright “junkies”, acutely dependent on the next “fix” in the form of loans or grants. However, assistance from international partners is declining. Having entrenched PAS in power, they no longer have much reason to keep spending money, and lately we tend to hear about new tranches only when the military sector is involved. This government is not particularly good at securing “cheap” financing either. Even our agreement with the IMF does not provide for any funding, so the authorities are borrowing on the domestic market at exorbitant interest rates. As a result, our debt portfolio is rapidly ballooning, with an ever-growing share of public funds going toward servicing it. At the same time, the economy is not growing, revenues are not increasing, and the country is weighed down by the enormous cost of energy purchases, the product of PAS’ “brilliant” energy and foreign policy. Ultimately, we’ve reached a point where it’s already difficult or impossible to fulfill basic obligations; the failed pension indexation and the planned pay raises for public sector employees leave no room for denial. But that’s still okay. After all, one shouldn’t think that the ruling party’s priority is the people. The main thing is that there be money for the bloated state apparatus, which has become a refuge for all the regime’s relatives, lackeys, and other hangers-on who need to be provided with cushy positions. And, of course, money is also needed to strengthen the country’s military capabilities. This is a demand from our European partners, who are turning Moldova into their eastern bastion and yet another platform for confronting Russia. Moldova has already committed to raising defense spending to 1% of GDP. That means more than a billion lei in additional domestic funding that has to come from somewhere. They have decided that it will come out of our pockets. And to provide at least some justification for this spending, they are working hard to conjure up a Russian threat out of thin air, supposedly making it necessary to purchase all sorts of costly air defense systems and other Western weaponry. The most despicable thing is that government bureaucrats still have the audacity to claim that this reform will not only not be a burden on ordinary citizens but will supposedly even benefit them. They claim that the main burden will fall on those with unhealthy habits: drinking, smoking, consuming energy drinks, and so on. Indeed, we’re supposed to feel sorry for these foolish individuals, that’s probably what PAS wants us to think right now. I wonder how many voters of this peculiar party fall into that category? They must be feeling pretty upset right now. In practice, some concessions have indeed been provided for, but they are merely a drop in the ocean of negative consequences. For every lei that remains in your pocket after this “reform”, there will be several dozen, if not several hundred, that you will have to hand over to the current regime. That will come in the form of fees on parcels from Chinese online marketplaces and higher restaurant bills, charges for every kilowatt of electricity or cubic meter of gas consumed beyond the already meagre allowance, taxes when selling property or receiving dividends, and additional costs when importing a car or purchasing “harmful” goods. Businesses should brace themselves as well. The nearly twofold increase in income tax for farming households looks particularly surreal at a time when farmers are already suffocating under the weight of exorbitant fuel costs, unaffordable utility tariffs, and other economic shocks. The government admits that it rushed the changes to the tax legislation: after all, the country has been so poorly governed that resources have virtually run out, and they now need to be urgently siphoned from citizens into state coffers. Hence the VAT on parcels, one of the most “profitable” elements of the reform, is being introduced as early as October 1. Hardly is such haste appropriate when it comes to a step of such fundamental importance to the state, one that will determine the future development or decline of the economy, as well as the welfare of its citizens. But, as we can see, the money is needed as soon as possible. I doubt that the actual benefits of this reform will reach that notorious 5 billion. Instead, even more businesses will lose profits or go underground; as real incomes continue to fall due to rising prices, citizens will tighten their belts even further and order fewer packages, and economic activity will decline. But these, of course, are mostly long-term consequences that our “yellow short-termers” are unlikely to care much about. The main thing is that, right now, money has been found to prop up the system and, above all, to maintain the bloated state apparatus. After all, the money has to come from somewhere to pay, for example, the average salary of over 40,000 lei at the “Patriot” center and similar organizations, which are popping up like mushrooms after rain. Drawing these dismal conclusions, I would like to add one more point. We have a country next door called Ukraine. It is waging an extremely difficult war, is also forced to cut back on many things for its citizens, and is desperately short of funds. One might think that there, too, all the levers of power are concentrated in the Presidential Office, while the government and parliament are largely “under control”. And yet even members of the Verkhovna Rada, despite the commitments already undertaken by Kyiv, despite Zelensky’s demands, and despite an EU tranche frozen over the issue, have repeatedly failed to pass a bill imposing VAT on parcels from online stores. They simply cannot bring themselves to put their own citizens in such a position. I am glad that our MPs are not burdened by such moral qualms and are ready to rubber-stamp any cannibalistic measure at a whistle from the presidential administration and the government. So it goes.