The Liberal Democratic Party of Moldova (LDPM) says the Government’s proposed tax policy for 2027 would increase the tax burden by expanding the tax base, raising certain rates, and introducing new obligations at a time when the economy needs investment and lower costs, reports TRIBUNA.

According to the party, in the context of low investment, a small domestic market, depopulation, and high energy and transportation costs, such an approach risks reducing investment, consumption, and competitiveness. An increase in VAT would put pressure on prices, consumption, and investment. Higher excise duties, particularly on diesel fuel, would increase costs for agriculture, transport, construction, industry, and distribution, with the impact ultimately passed on to consumers. Raising the tax rate for peasant farms from 7% to 12%—an increase of more than 70%—would hit a sector already facing a shortage of capital and the consequences of rural depopulation, reduce investment, and potentially expand the informal economy.

“The draft abolishes tax exemptions for trade unions, employers, savings and credit associations, and private educational institutions. The Government should justify the economic impact and explain the differences in the tax treatment of these categories. The abolition of the capital gains tax exemption could double the effective tax burden from 6% to 12%, while the tax on dividends would increase from 6% to 8%. This reduces investment returns and discourages private capital. Tax policy should encourage the retention and reinvestment of capital in Moldova.

Regarding real estate transactions, this is not a 12% tax on the entire value of an apartment, but taxation of capital gains. The Government should provide calculations on the impact on citizens’ property. An 18% tax on income from certain financial and insurance activities could increase the cost of services and financing in an economy where access to capital is already difficult.

Additional taxation of e-commerce and postal shipments could limit consumers’ access to affordable goods or products unavailable in Moldova, without necessarily ensuring protection for domestic producers,” the party said.

LDPM opposes expanding the powers of the State Tax Service to collect individuals’ tax debts directly from their bank accounts. Such a measure should be accompanied by prior notification, a deadline for payment or appeal, protection of funds exempt from collection, and mechanisms for correcting errors.

“The effectiveness of tax collection cannot take precedence over the right to property. The problem with the 2027 tax policy is its excessive focus on how much the state can collect and insufficient attention to how much the economy can produce. Sustainable budget revenues should be ensured through economic growth, rather than through a constant increase in the tax burden.

LDPM calls on the Government to publish a comprehensive impact assessment and urges Parliament not to approve tax increases until verifiable sectoral and macroeconomic calculations have been presented, including:

• assessments of the impact on economic growth and inflation, private investment and Moldova’s attractiveness to capital, agriculture and peasant farms, SMEs and services, transport and logistics, the real estate market, the financial sector and the cost of credit, as well as real incomes and purchasing power;

• calculations for each tax, fee, or excise increase or change in the tax regime, specifying the additional budget revenues, the costs to the economy, and the risks to investment, consumption, and business activity.

Moldova cannot stop depopulation by raising taxes on farmers, attract capital by making investment more expensive, or increase competitiveness by raising energy and transportation costs.

LDPM advocates responsible, predictable, and fair tax policy. Public finances must be strengthened through economic growth, the reduction of inefficient spending, improved governance efficiency, and the natural expansion of the tax base,” the party concluded.