Moldovan president endorses controversial fiscal amnesty package

Moldovan president endorses controversial fiscal amnesty package
The legislation was previously approved by the Moldovan parliament in July.
By Carmen Simion in Bucharest August 10, 2018

Moldovan President Igor Dodon said on August 9 he will endorse a controversial fiscal reform package which includes the legalisation of previously undeclared assets, amid criticism from the International Monetary Fund (IMF), the EU and the US embassy.

According to the legislation, Moldovans will be able to voluntarily declare undeclared goods or those which have been declared as bearing a lower value. In return, they will have to pay a tax of 3% of the value of the goods by February 2019. The legislation will not apply to people who have held the position of president, member of the government, member of parliament, judge, prosecutor, or other positions in state institutions.

“Essentially, the measures could boost the country’s economic development, even if they were implemented too late,” Dodon wrote on Facebook. “A delayed reform, even if it contains deficiencies which will be later solved, is better than permanent disorder in the field of budgetary-fiscal administration,” he added.

The controversial legislation was adopted by the parliament in July, receiving favourable votes from the ruling Democratic Party (PDM) of Vlad Plahotniuc and the European Popular Party of Moldova (PPEM) of former Prime Minister Iurie Leanca. Dodon’s Socialist Party (PSRM) did not vote the new legislation, leaving the parliament meeting as a sign of protest it had been included on the agenda at short notice, according to

Opponents of the new legislation say the adopted fiscal measures are beneficial to those with high incomes. In addition, critics claim it could lead to the legalisation of stolen funds, including those in the $1bn banking fraud revealed in 2014.

After Dodon announced he will endorse the legislation, the vice president of the opposition Dignity and Truth Party (PPDA), Alexandru Slusari, claimed Dodon is thus helping Plahotniuc “solve all strategic problems,” according to Opposition members have previously speculated about an alleged agreement between the ostensibly rival politicians.

“Is still there anybody who believes that this Dodon is not Plahotniuc’s vassal? He is helping him solve all strategic problems, even if he does this at the expense of his own party,” Slusari said.

The US embassy in Chisinau said on July 26 that the legislation legitimises theft and corruption, and will damage Moldova’s business climate.

 “The Embassy of the United States is gravely disappointed by today’s passage of legislation that will diminish Moldova’s ability to fight money laundering. The law on voluntary declaration and fiscal stimulation (also called the “capital amnesty law”) legitimises theft and corruption, and will damage Moldova’s business climate,” the US embassy wrote on Facebook in July.

The IMF has also said that the package of tax initiatives and capital amnesty are not in line with the objectives of the Fund-supported programme with Moldova.