State Lacks Funds to Refund VAT: Liabilities Exceed 10 Billion Lei

At this stage, the state cannot afford to significantly expand the VAT refund mechanism due to a lack of budgetary resources needed to cover these payments. State Secretary at the Ministry of Finance Corina Alexa made the statement during public consultations on a draft law aimed at simplifying tax and customs legislation, bani.md reports. According to her, the authorities would like to offer a faster schedule for expanding VAT refunds, but current budget constraints make this impossible. “We cannot commit to the refund process without having sources of funding to cover these refunds to the extent that they may arise,” Corina Alexa said. The State Secretary noted that the Ministry of Finance is trying to move forward gradually, depending on the available fiscal space, and intends to review the concept of the VAT refund mechanism so that refund volumes can increase over time. “We are taking small but steady steps in this direction, as far as the budget parameters allow us,” Alexa said. At the same time, the Ministry of Finance is working on implementing the European directive on VAT. According to the State Secretary, the new draft law is expected to be presented within a relatively short period, although the full implementation of the new rules will be linked to the process of joining the European Union. Corina Alexa explained that some provisions could be introduced earlier if the authorities and business representatives conclude that they can be applied without significant risks to tax administration and the budget. “As for the overall timeline for the aspects regulated by the directive, we are looking more toward 2030,” she clarified. The Ministry of Finance intends to continue consultations with business representatives and experts before introducing the new rules in stages, so that the changes can be implemented in line with administrative capacity and available resources. At the same time, Corina Alexa noted that the state’s outstanding obligations to various segments of the economy currently exceed 10 billion lei. This limits the possibility of rapidly expanding the VAT refund mechanisms.