VAT refunds delayed while new state office receives funding
Finance Ministry State Secretary Corina Alexa has said the treasury has no money for the promised VAT refunds, while a new institution under the State Chancellery is set to receive 46.5 million lei.
“We cannot commit ourselves to starting the reimbursement process without having sources of coverage for these refunds in the amounts in which they may arise,” the Finance Ministry state secretary said during public consultations on a draft law simplifying tax and customs legislation.
According to Alexa, the authorities would like to offer a faster timetable for expanding reimbursements, but current budget constraints do not allow it. She said the Finance Ministry was trying to move forward gradually, “step by step, but confident step”, and planned to rethink the VAT refund mechanism so that the amount reimbursed could increase over time.
“As for the overall timetable on the aspects regulated by the directive, we are somewhat closer to 2030,” Alexa said.
She also noted that, at this stage, the state’s obligations to various sectors of the economy exceed 10 billion lei, limiting the scope for a rapid expansion of VAT refunds.
Government creates new office under State Chancellery
While the Finance Ministry explains why it cannot return money to businesses, the government is promoting a draft decision to create the public institution Office for the Implementation of Strategic Infrastructure Projects of National Significance.
The new structure will be created under the State Chancellery by absorbing three existing institutions: the Public Institution Office for External Assistance Programme Management under the Finance Ministry; the Public Institution Unit for the Coordination, Implementation and Monitoring of Health Sector Projects under the Ministry of Health; and the unit implementing the project to build a penitentiary facility in Chișinău under the National Administration of Penitentiaries.
The State Chancellery will exercise the founder’s functions on behalf of the state. The new office will have a maximum staffing level of 26 positions, including a director, deputy director and five service heads.
According to the draft, the annual payroll fund is estimated at 38.5 million lei. Divided across 26 staff positions, that amounts to average salary expenditure of around 123,000 lei per month per post.
Another 5 million lei a year is earmarked for operational expenses, including premises, IT and transport, while 3 million lei is planned for external technical assistance. The new structure’s total annual budget will therefore stand at around 46.5 million lei.
The authors of the draft argue that creating the office will not increase the total number of employees in central public authorities. The staff is expected to be formed from employees of the three bodies that will be reorganised and absorbed into the new institution.
Tofan’s promises on bureaucracy face awkward test
Back in July, Prime Minister Vasile Tofan promised to cut bureaucracy and carry out a large-scale audit of the central administration, agencies and subordinate institutions.
“The state must be smaller where it duplicates functions,” the prime minister said at the time.
He also promised to identify unnecessary functions and structures that did not justify the public funds spent on them, with such institutions then to be reorganised or merged. Tofan also vowed to deal with “unjustifiably high salaries” in the public sector.
“I will not tolerate inflated salaries, non-transparent bonuses and exceptions pushed through the back door,” he said in July.
Two months have passed. No audit has been presented. Instead, there is now a draft project for a new institution with an annual budget of 46.5 million lei and the familiar reservation that “staff numbers will not increase” because people will simply be “transferred” from the three structures being abolished.
If three institutions are merged into one, it would be logical to expect the total number of staff and the total budget to fall. But the figures in the draft point in another direction: 26 positions, 38.5 million lei for salaries, plus operational expenses and technical assistance.
Meanwhile, businesses are still waiting for VAT refunds. The state owes the economy more than 10 billion lei.
“We are taking small steps in this segment, but confident ones, and as far as the budget parameters allow us,” Alexa said.
Judging by the figures, the budget parameters allow 46.5 million lei for a new institution. What they do not allow, apparently, is returning to businesses what they are owed.
