Finance Minister about VAT rate in HORECA sector: It is too early to say what rate will be

The authorities will carry out a reassessment of the tax system, after which proposals will be presented regarding the value-added tax rate in HORECA sector. Minister of Finance Andrian Gavriliță made the statements today.  He noted that the purpose of any proposed changes is to ensure fairness in the tax system and to make the economy as prosperous as possible.

“We are still in the working process. We are reassessing the entire tax system. VAT is a small component of it. The objectives are very simple and clear. We have established the pillars – simplicity, convenience, competitiveness and compliance. We are using not only local, but also international expertise. It is premature to say now what the rate should be, but we will certainly aim, on the one hand, to have as much fairness as possible in the tax system and, on the other hand, to ensure the economy is as prosperous as possible,” said Gavriliță.

The official pointed out that discussions are currently taking place with all parties involved in the process, in order to identify the best solutions.

“We have multiple discussions with the business community. Even this week we had very good discussions, including with associations in the tourism sector. We discussed all the support mechanisms that exist today, from meal vouchers, holiday vouchers, to zero tax on reinvested profit, to our initiatives to reduce the tax burden on wages, and to potential new instruments. We are going to have more discussions, and the tax policy will emerge from the public consultations in the spring, respecting all the rules and the implementation schedule. Nothing will happen too abruptly before 1 January 2027,” he said.

Regarding the possible application of an 18 percent VAT rate, Andrian Gavriliță said that it is premature to say what the exact rate will be, as it will be determined following extensive assessments and discussions.

“It is premature. I think it was an approximation, but in principle we need to revise where we have gaps, because unfortunately our tax system is such that teachers and police officers pay 40% of their salaries, while others pay a single-digit percentage. Overall, there is certainly room for revision so that we have more fairness, because it is ordinary working citizens who suffer the most. But it is premature now to say what the VAT rate will be in one sector or another,” concluded Andrian Gavriliță.

Currently, the value-added tax in HORECA sector is 8%. Recently, Prime Minister Alexandru Munteanu acknowledged that this rate could be changed. The National Association of Restaurants and Leisure Venues of Moldova (MĂR) reacted to this, noting that an increase in the VAT rate “would be a decision with extremely serious effects on this important sector of the economy, which has been severely affected in recent years.” “Such a measure could translate into a chain of bankruptcies, the loss of thousands of jobs and a decrease in state budget revenues,” the Association stated.