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Moldova’s parliament last week passed a law that cuts taxes and offers amnesty to those who register their assets.
Moldovans who earn a monthly income less than the equivalent of $95 (82 euros) will not be required to pay income tax. An amnesty will also be introduced with the aim of allowing investors to register assets without providing documentation of how they were acquired, requiring them only to pay a 3 percent tax. The measures are scheduled to come into effect in October.
Parliamentary Speaker Andrian Candu said the law aims to help poor and middle-income citizens, and that it is not designed to benefit the wealthy. The ruling party also argues the asset amnesty will shrink the shadow economy, Reuters says.
However, the International Monetary Fund – a significant lender to the country – criticized the law.
"In IMF staff's preliminary view, the recently approved package of tax initiatives and capital amnesty are not in line with the objectives of the Fund-supported program," Reuters quotes Volodymyr Tulin, the IMF resident representative in Moldova, as saying. “Specifically, the adopted measures will increase the regressivity of the tax system, could undermine tax compliance, and pose significant fiscal risks."
For its part, the U.S. Embassy in Chisinau said the law “legalizes theft and corruption, and also damages the business environment in Moldova.” And the head of the EU mission in Moldova, Peter Mihalka, heaped on additional reproach:
"The legislation is incompatible with current reforms aimed at strengthening the rule of law; the fight against corruption, money laundering, and organized crime; and improving the business climate," he said, RFE/RLreports.
One of the law’s fiercest critics, opposition leader Andrei Nastase, said, "The fiscal amnesty law recently approved by the parliament in reality amounts to the legalization of fraudulently acquired money.”
Moldova has dealt with major losses brought on by money laundering schemes enabled by a corrupt judicial system, critics say.
In addition to the tax law, Moldova recently passed a golden visa program that permits foreigners to acquire Moldovan citizenship by investing as little as 100,000 to 250,000 euros in the country, Balkan Insight notes.
Compiled by Tyler Haughn
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