Moldova government moves to defuse farm protests over VAT hike
Prime Minister Alexandru Munteanu held urgent talks with agricultural associations on Friday to defuse an upcoming wave of regional protests. The government offered legal concessions to ease the financial pressure on farmers, who are reeling from aggressive new fiscal reforms.
The political standoff stems from a controversial tax overhaul for next year. The new policy eliminates the reduced 8% Value Added Tax (VAT) rate for agriculture, replacing it with a standard 20% rate.
The looming protest
In response to the tax hike and a perceived lack of historical dialogue, the "Forța Fermierilor" Association scheduled massive regional protests involving heavy agricultural machinery for June 24.
To bypass the deadlock, Munteanu, accompanied by Agriculture Minister Ludmila Catlabuga and Finance Minister Andrian Gavriliță, met with the National Farmers Federation and the "Women for Resilient Agriculture" Association.
Legal concessions
The government pledged immediate updates to the Insolvency Law and the Enforcement Code. These legislative rollbacks aim to eliminate regulatory clauses that farmers currently flag as overly burdensome.
Munteanu stated that his administration is committed to providing predictability and fair rules. He stressed that the government will work continuously with the sector to protect local agricultural businesses.
The fiscal stance
Despite the legal concessions, Chisinau is maintaining its stance on the VAT harmonization. Officials argue the unified 20% rate is necessary to eliminate economic inequities and stimulate broader macroeconomic investments.
To soften the blow, the state promised to implement monthly VAT refunds for agricultural businesses. Additionally, the government plans to slash diesel fuel excise duties down to the minimum levels permitted within the European Union.
Translation by Iurie Tataru
