Proposed VAT hike raises bankruptcy fears in Moldova
Moldovan grain and oilseed producers have rejected a Ministry of Finance proposal to increase the agricultural value-added tax (VAT) from 8% to 12%. The Farmers' Force Association warned that this relative 50% tax increase could mark a critical breaking point, triggering widespread bankruptcies among small and medium-sized farms.
The association requested an urgent meeting with Finance Minister Victoria Belous. They also called for the participation of Serghei Ivanov, head of the parliamentary agriculture committee, alongside representatives from the Ministry of Agriculture.
Rising input costs and falling market prices
Agricultural producers report that operating conditions have deteriorated sharply over the past year. Diesel prices have risen by roughly 70% since March, while fertilizer costs jumped 35–40% in May.
At the same time, market prices for grain have declined. Wheat prices fell by €0.03 (approx. 0.6 MDL) per kilogram, while rapeseed prices dropped by nearly €0.05 (approx. 1 MDL) per kilogram due to regional market pressures.
Producers emphasized that crop farmers received no direct subsidies this year, with no direct payments planned under the national strategic framework for next year. Recurrent natural disasters over the past five years have already pushed nearly 25% of micro, small, and medium farms to the brink of insolvency.
Fiscal impact and European comparisons
Industry estimates show that raising the VAT rate to 12% would add an extra tax burden of about €25.5 (approx. 500 MDL) per hectare. Across the entire sector, this translates to roughly €38.2 million (approx. 0.75 billion MDL).
"Farmers will fight to maintain the 8% VAT rate through all available legal means," the association declared in an official statement.
The group noted that no European Union member state levies an agricultural VAT higher than 11%, with countries such as France, Germany, Italy, and Poland applying rates between 4% and 7%. Furthermore, EU farmers receive direct subsidy payments ranging from EUR 200 to EUR 500 per hectare.
Government opens public consultationGovernment spokesperson Dumitru Ciorici stated that the draft tax policy was formally introduced on August 6 and is currently open for public consultation. The government expects feedback and counterproposals from all interested sector representatives. The Ministry of Agriculture confirmed its readiness for dialogue, reaffirming that ongoing communication with agricultural organizations remains a standard practice.
The measure is part of the 2027 fiscal strategy presented by Prime Minister Vasile Tofan. The broader plan aims to reduce taxes on labor and investment while raising revenue through adjusted VAT rates and excise duties. Under the draft, basic foods and medicines retain an 8% VAT rate, while agriculture, hospitality, and tourism transition to 12%.
Translation by Iurie Tataru
