Finances

​WB RECOMMENDATIONS TO MOLDOVAN AGRICULTURE

13 octomber, 2015

Experts of the World Bank conducted a research in efficiency of Moldova’s agriculture, proposing several recommendations, which may help extending the branch’s contribution to the GDP.

During Monday’s press conference in the WB representative office in Chisinau, bank’s experts pointed at the importance of agriculture for the country’s economy. The branch constitutes 14% of GDP and 25% of the country’s working population is employed in this sphere.

Currently, agriculture is maintained at the expense of state subsidies, investments in the sphere of services designed for this branch, as well as donors, which provide resources to the budget for special agriculture supporting programs.

The research points at the fact that no transformations happened in the sector of services for agriculture, which in Moldova are provided just in the way it was done in the former USSR. Researches and scientific developments for the branch, as well as the training of specialists for agriculture have a low rate of result and efficiency.

Bank’s experts recommend to the state to modify or amend a number of target programs in agriculture and even to reject some of them, for example the program of insuring risks in agriculture, which is implemented at the expense of state and the Anti-hail service’s money.

The research recommends changes in attitude to tax exemptions, which currently is applied in the Moldovan agricultural sector. It is about transiting to the value added tax of 20% against 8% and payment of the income tax worth 12% but not 7%.

The analysis of the small and medium enterprises in agriculture demonstrated that this category of business does not see any positive results from the 8% VAT, while large enterprises achieve great benefit from this.

The application of the VAT in agriculture at the level of 20% would give additional 500 million lei to the budget i.e. more than 0.5% of the state GDP.

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