Moldovan government shifts tax burden from workers to banks
Low-income workers in Moldova will receive higher personal tax exemptions under a new fiscal overhaul package. The measure aims to boost formal employment and curb undeclared payrolls across the country.
Prime Minister Vasile Tofan emphasized that the reform repositions the tax system to shield low-wage earners while tightening compliance.
"Our goal is to reduce the tax pressure on labor and encourage formal hiring," Prime Minister Tofan stated during a television broadcast. He added that easing labor taxation will help authorities combat tax evasion, which remains difficult to detect through traditional audits.
Cracking down on dividend abuse
The cabinet is also targeting business owners who exploit corporate distributions to bypass payroll taxes.
"We will adjust the dividend tax upward," Tofan explained. He noted that certain entrepreneurs withdraw cash via dividends to pay off-the-books salaries and avoid employment taxes.
Banking sector tax hike
As part of the package, the government confirmed plans to raise the corporate income tax rate for banks and financial institutions by 50%. The profit tax rate will increase from 12% to 18%.
Additionally, excise duties on tobacco and alcohol will rise to discourage consumption. The government will also increase taxes on gambling, a sector from which the state intends to secure a higher share of public revenue.
The updated fiscal concept is set for official presentation today, August 6. The revision follows public criticism of initial proposals regarding medicine taxation and real estate transaction rules.
Translation by Iurie Tataru
