Amnesty capital undermines the IMF's new tranche. Money could only come in June-July 2019

After the suspension of EU macro-financial assistance, a bad news comes from the International Monetary Fund. The IMF evaluation mission, due to come on September 20, will arrive in Chisinau only in the first half of 2019. Thus, the next installment from the Fund, which Chisinau counted for this year, could come in June-July 2019 , if we consider that after the February 24 parliamentary elections, the Government's training will continue, then the mission's assessment and the bureaucratic procedures of the IMF, which lasts 2-3 months, stated in the show "15 minutes of economic realism" the journalist, Vlad Bercu.

The authorities had to take a serious exam before the International Monetary Fund mission, which was on a visit to Chisinau from September 13 to September 20. So there was no talk of a new IMF tranche. The Fund's experts have been informed about the macroeconomic situation and discussed budgetary policy, monetary policy, and other relevant policies in the context of the existing program supported by the IMF through the ECF (Extended Credit Facility) and EFF (Financing Mechanism extended).

In recent months, the International Monetary Fund has been worried about some government decisions and has announced that it will make further judgments. It is about fiscal stimulus and capital amnesty.

On 26 July, on the very day that Parliament voted amendments to the Fiscal Code and the Law on Voluntary Declaration and Tax Incentives, the IMF Permanent Representative to the Republic of Moldova announced that "the preliminary opinion of the IMF experts is that the legislative package of budgetary and fiscal changes and measures amnesty of capital, recently approved, is not in line with the objectives of the IMF-supported program. The measures adopted will increase the regressive nature of the tax system, reduce the degree of tax compliance and expose the fiscal-fiscal system to significant risks. IMF experts are currently analyzing the implications of the package of measures adopted on the basis of accumulated information. "

"Authorities probably had to respond to why a new tax amnesty was needed after 2007, which has not really excelled by major effects. And even if the voluntary declaration does not refer to dignitaries of different rank or persons involved in the devaluation of the three bankrupt banks (Savings Bank, Social Bank, and Unibank) and that a check is made of the declared volunteer income, however experts will have questions at who will want to have answers. And not just on this issue, "said Vlad Bercu.

Together with the IMF, the World Bank is worried about the recently approved package aimed at boosting tax and capital amnesty. These can undermine the Government's commitment to fighting corruption and could have a negative impact on tax compliance, which will lead to significant tax risks. The package is incompatible with the World Bank Group's policy reform program.

In conclusion, Vlad Bercu, who quotes the head of the IMF mission in Chisinau, said that the authorities need to continue to pursue prudent policies and ensure the progress of reforms over the duration of the program. It is essential that in the pre-electoral period the authorities abstain from unforeseen budget expenditures.

The three-year program of the Moldovan authorities, supported by the IMF, was approved on 7 November 2016. It is funded by a total credit of 129.4 million Special Drawing Rights (SDRs), equivalent to about 187 million US dollars, out of which about 115 million have already been allocated.

The show is made by IDIS "Viitorul" in partnership with Radio Free Europe.

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