Mayors ask to be allowed to set local taxes

Mayors and representatives of the Congress of Local Authorities of Moldova (CALM) protested in front of the Ministry of Finance and then marched to the Government Building, protesting against the Cabinet’s intention to cap local taxes. They said the initiative runs counter to the Constitution and the international commitments, being an attack on local self-government, IPN reports.

CALM executive director Viorel Furdui said the Government, by the budgetary-fiscal policy, is trying to impose limits on the local power. This is violation of the Constitution, of the decentralization principle. The local authorities are limited in their right to independently design and implement the fiscal policy. This will lead to the limitation of the resources for supplementing the local budgets and, consequently, to the reduction of the possibilities of solving people’s problems.

Mayor of Strășeni town Valentina Casian noted that the Republic of Moldova made commitments related to local self-government to the EU. What they propose now is nothing but derogation from the decentralization principle and affects good governance at the local and central levels. The local public authorities should be respected and should be engaged in the formulation of all the documents concerning them.

Mayor of Edineț Constantin Cojocaru said the capping of taxes means equaling of small entrepreneurs and large entrepreneurs, but this is not right. “The functionary of the Ministry of Finance does not know better what’s happening in Edineț, in Strășeni, in the south, north or center, no matter where. We cane to vehemently say “Nu” to this. We came to vehemently say that the mayors represent the people,” said the mayor.

Also today, a number of business associations signed a public statement in support of the Ministry of Finance’s initiative to cap local taxes that, according to them, is aimed at ensuring predictability in entrepreneurial activity. The statement says local self-government is one of the basic principles of the local public administration, being guaranteed by the national legislation and by the international one.  However, the legislation does not restrict the setting of upper limits on local tax rates by law. Both the Constitution of the Republic of Moldova and the European Charter of Local Self-Government allow for the setting of local taxes within the limits of the law. The taxes are exaggerated in parts and should be reduced. The entrepreneurs are in favor of capping local taxes during three years by annually indexing these based on the inflation rate.

In a reaction, the Ministry of Finance said it is ready to have discussions on any of the subjects addressed by the draft fiscal and customs policy for 2021. The capping of local taxes was proposed following multiple requests from the business community and business associations.

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