Moldova tightens voluntary tax compliance bill in line with IMF’s recommendations

Moldova tightens voluntary tax compliance bill in line with IMF’s recommendations
/ Mirek237
By bne IntelliNews November 13, 2018

International financial institutions welcomed Moldova’s amendments to the controversial bill under which residents can declare previously undeclared, or under-declared, wealth. 

Moldova’s parliament amended the voluntary tax compliance (VTC) law on November 8 by doubling the fee paid by those declaring their wealth to 6% and further restricting the number of recipients allowed to take advantage of its provisions. 

Categories of public servants barred from benefitting from the VTC were broadened to include lower-ranking civil servants. Politicians, bankers and high-ranking public servants were already excluded in the initial form of the law.

The amendment of the voluntary tax compliance law is a step in the right direction but there is much more to do in order to address the issues generated by the law, according to the International Monetary Fund, commenting on the bill. 

There will be more amendments to the law, parliament speaker Andrian Candu announced. The revision of the controversial law is aimed at bringing it into line with the IMF’s recommendations and thus unblocking the next tranche of IMF funding scheduled for next year under the three-year programme signed by Moldova with the Fund in 2017.

The World Bank cheered the move as well and urged the country to enforce the revised provisions immediately.

The VTC bill prompted concerns among the country’s development partners after the country’s second-largest bank Moldindconbank laundered tens of millions of dollars from Russia and $1bn was stolen from the banks and, eventually, from the central bank’s reserves. But the criticism has always been vague, as the bill complies with international standards aimed at avoiding money laundering.

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