Moldova targets January 2027 for public sector pay rises

Moldova plans to raise some public sector salaries by up to 37% from January 1, 2027, Prime Minister Vasile Tofan said, estimating the reform's cost at 3.5 billion to 5.5 billion lei.

Pay rises planned amid budget pressures

The proposed increases would benefit employees in education, healthcare and the police. Under the plan outlined by Tofan, a cook working in a village would receive a 37% pay rise, a kindergarten teacher 31%, a police officer with five years of service 25%, and a nurse 23%.

“More than ever, it is important to move forward with this salary reform. These are positive developments, but the cost to us is 3.5 billion to 5.5 billion lei,” Tofan said during the Raport podcast.

The government is preparing the measures as it seeks to curb public spending and reduce the budget deficit. It must also secure funding for energy compensation payments, pensions and other social expenditure.

Tofan said the biggest challenge in preparing next year's budget would be finding sufficient resources to cover these commitments while limiting spending.

“We need to cut spending, and obviously, we must first eliminate waste. There is waste in every organisation, including the state,” he said.

However, the prime minister argued that the main budgetary challenges lie in major expenditure items rather than the central administration. He said around 1,800 people work in the central government apparatus, compared with more than 200,000 public sector employees.

Tax changes to help finance the reform

The government also intends to use changes to the tax system to support its budget plans. Tofan said the proposed approach would reduce taxes on labour and investment while increasing excise duties on alcohol and tobacco and taxes on gambling.

“We wanted to reduce taxes on labour and investment, but increase them on alcohol and tobacco,” Tofan said, adding that the two categories could generate close to one billion lei in tax revenue.

He also estimated that gambling taxes could bring in another one billion lei.

The government is developing its 2027 budget while seeking to reduce the deficit to below 3% of gross domestic product (GDP). The proposed salary increases will therefore depend on the availability of sufficient budgetary resources and the progress of the related fiscal reforms.

Translation by Iurie Tataru

RELATED COVERAGE

Moldova targets January 2027 for public sector pay rises

Bogdan Nigai