PSRM suggests postponing introduction of higher VAT rate in agriculture

The MPs of the Party of Socialists (PSRM) propose introducing the VAT rate of 12% on agricultural products, up from the current rate of 8%, not from January 1, as the draft budgetary-fiscal policy for 2021 provides, but from July 1, 2021. The keeping of the VAT rate of 8% on primary agricultural production is one of the demands of the farmers who are protesting in central Chisinau, IPN reports.

The PSRM registered an amendment to this effect to the bill that was given a first reading on December 3. In the current variant, the bill provides that the VAT rate in agriculture will be raised from 8% to 12%, while on fertilizers will be decreased from 20% to 12% as from January 1, 2021.

Socialist MP Petru Burduja, deputy chairman of the Parliament’s commission on economy, budget and finance, in a press briefing said the revision of the current VAT regime applied to primary agricultural production is aimed at developing and enhancing the competiveness of national producers. The introduction of this measure on January 1, 2021 will create economic problems to farmers who didn’t manage to sell the whole crop of this year and who bought fertilizers at the current VAT rate.

The Socialist MPs consider the introduction of a common VAT rate of 12% on July 1 will balance the fiscal burden on agricultural producers. “By this measure, indirect support for farmers to the value of 222 million lei will be provided in addition to the subsidies of over 1 billion lei that will be allocated to the sector in 2021,” PSRM said in a press release.

The draft budgetary-fiscal policy for 2021, together with other bills, including the 2021 state budget, were adopted by the Socialist MPs, in concert with the For Moldova Platform, which includes the MPs of the Shor Party, on December 3. The bills weren’t debated in Parliament as the opposition blocked the central rostrum, invoking non-transparency and the hurry in which the legislative proposals were put to the vote.

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