Chicu: This Is the Largest Tax Hike in Moldova’s History

Former Prime Minister Ion Chicu believes the new measures will hit businesses, drive up diesel prices and could produce the opposite of the results the government is seeking. “Overall, this tax policy, even taking into account the concessions the government made between the first and second readings, remains the largest increase in tax rates in the history of this state. Or, at the very least, since 1997, when the current Tax Code was adopted,” Ion Chicu said, ziua.md reports. One of the most controversial provisions, in the MP’s view, is another increase in excise duties on diesel fuel: a 20% hike in 2027, followed by further increases in subsequent years through 2029. He believes this will deal a serious blow to the economy, particularly to fuel-dependent industries. The adopted document provides for a 20% increase in the excise duty on diesel fuel in 2027, while excise duties on most other goods subject to such taxes will rise by 10%. Chicu also criticized the introduction of VAT on natural gas from April 1, 2027. Despite the authorities’ decision to raise the consumption threshold eligible for the reduced rate, the former prime minister believes the measure will place an additional burden on consumers. Under the approved document, the first 150 cubic meters of gas consumed by households each month will be subject to an 8% VAT rate. Consumption above that threshold will be taxed at the standard rate of 20%. Another target of criticism is the differentiated taxation of agricultural products. According to Chicu, restoring the 8% VAT rate for certain types of grain while retaining a 12% rate for others creates disparities that are difficult to justify on economic grounds. The MP claims that the opposition attempted to mitigate the impact of the new tax policy through amendments, but most of its proposals were rejected. Of the 22 amendments he submitted jointly with another MP, only three were approved, either fully or partially, Chicu said. The former prime minister paid particular attention to an amendment intended to prevent tax exemptions for remuneration in the form of shares in the banking sector. According to him, the original wording could have allowed recipients to avoid paying income tax as well as social security and health insurance contributions. Chicu is also concerned about the expanded powers of the State Tax Service. He claims that the new provisions establish mechanisms for the forced recovery of debts directly from individuals without first obtaining a court ruling. In the MP’s view, such mechanisms run counter to the government’s stated goal of simplifying tax legislation and could increase administrative pressure on taxpayers. Chicu also doubts that the authorities will be able to generate the additional 5.1 billion lei in budget revenue projected as a result of the new measures.