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BBC Romanian, 9 May 2007

IMF concerned about tax amnesty suggested by the Government

Upon completion of his visit to the Republic of Moldova, Thomas Richardson, head of the IMF staff mission stated that satisfaction on the economic growth marked during in first three months of the current year.  

In order to help the authorities from Chisinau in overcoming negative consequences generated by the external shocks experienced last year, the second tranche of money disbursed by the IMF could be doubled as compared to the initially agreed amount.

Thomas Richardson, Deputy Division Chief, Northeastern Division in the IMF’s European Department in his interview to BBC told that jointly with the Moldovan authorities they have reached a preliminary agreement on the new Memorandum of Economic and Financial Policies for the reminder of 2007.

"The mission has marked with satisfaction that until presently the results of implementation of program with the IMF were positive”, - stated Thomas Richardson and expressed his satisfaction by the economic growth indicators achieved by the Republic of Moldova during the first three months of the current year.

"The economic growth that we see is at large concentrated in consumption and construction and is basically financed at the expense of remittances from the Moldavians working abroad”, - says IMF representative.

"This is a good phenomenon as it supports incomes of the population and stimulates economic growth. However, for a long term, it is important that this economic growth should be generated mostly by export and investments", - added Thomas Richardson.

"We would like to see an improved business climate that would make money investments more attractive as compared to what it is now, so that businesses would be willing to invest in Moldova. This would automatically stimulate economic growth and contribute to poverty reduction. We also believe that the financial system needs to be upgraded and become more competitive so that people could have on their bank accounts efficiently functioning investment projects", - said Thomas Richardson to the BBC.

Being asked by the BBC on his opinion of president Voronin’s initiative on liberalization of economy, the IMF representative stated that these reforms are timely although contain certain risks.

"We see the biggest risk with tax amnesty. The IMF does not like to have tax amnesty in either of the countries and I believe it is clear why: because we are the creditors. We do not like it when someone who borrowed money from us is forgiving somebody else’s debts. We do not approve of it as cancellation of tax liabilities tends to be occasionally repeated. And it is important that the Government takes measures that this amnesty is the first and last one”, - said Thomas Richardson.

In May of the last year, the International Monetary Fund approved a loan for the Republic of Moldova worth USD 116 millions.

More than half a year later, the IMF decides to increase the size of lending up to USD 163 million to cope with the consequence inflicted by the external shocks.

The IMF staff missions visit Moldova once every three months to review the performances on practical implementation of the macroeconomic policies and reforms in the country.