VIDEO // Authorities to develop new concept of fiscal policy; Moldovan PM-designate says government to propose reform due to place emphasis where it is needed

The future government will develop a new concept of fiscal policy, which will be broadly consulted with all stakeholders and the proposed decisions will be explained in detail to citizens. The position was expressed by Prime Minister-designate Vasile Tofan, during the presentation of the activity programme of the new cabinet in parliament today.

Vasile Tofan stressed that fiscal reform is a complex problem, but one that cannot be avoided indefinitely.

“The state cannot tax so many things. It can tax consumption, investment, labor, vices. These four generate more than 95 per cent of the budget, and here I also include excise duties. In a perfect world, we should only work on rebalancing between these four areas: taxing labor less, vices more, unifying consumption, further adjusting where needed, etc. In our case, it is about a slight increase in the ratio between tax revenues and the size of the economy. I very much hope we will reduce tax increases to a minimum,” Vasile Tofan said.

He noted that the state must find a compromise between fiscal reform and wage reform.

“But we must understand that people expect higher salaries. For this to happen, we need to reform the law on remuneration. The adoption of the new remuneration law will allow us to increase salaries for teachers, doctors and law enforcement officers. I will be honest: I do not have an answer as to how much the value added tax (VAT) will increase or decrease, or how some taxes will change. It is a question that is too complex and too sensitive for us to allow improvisations here. However, I can tell you that we are currently working on a new concept of fiscal reform, which I want to submit to consultations as soon as possible. And I also want us to learn from the mistakes of the previous initiative,” the prime minister-designate added.

He assured that the new concept would be widely consulted, in a transparent manner.

“This is what I can promise: we will act transparently, we will propose a fiscal reform that will place the emphasis where it should be – lower taxation of labor and investments – but we will have to compensate in other areas,” Vasile Tofan underlined.

Prime Minister-designate Vasile Tofan today in parliament presented the activity programme of the new government and the entire governmental team. A video of his speech was published on social media.