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2011-06-06/11:41/ Decision to initiate programs with IMF is taken by countries, not the Fund, Tokhir Mirzoev

Chisinau (IPN) The programs of the International Monetary Fund negotiated with a country envision reforms, while their implementation implies larger or lower social costs. Thus, the beneficiary countries are those that decide they need these reforms and a program with the Fund, IMF Resident Representative in Moldova Tokhir Mirzoev said in a meeting of the Chisinau Press Club, organized by the Committee for the Freedom of the Press, Info-Prim Neo reports.

According to Tokhir Mirzoev, within these programs the IMF systemically assesses the macroeconomic situation and correctness of the budgetary-fiscal and monetary policies implemented. These assessments represent a signal for the potential investors. The IMF also provides financial support for maintaining macroeconomic stability and consultative assistance in this respect.

“At the end of 2009, when the world financial crisis seriously affected the economy of Moldova and the budget revenues decreased drastically, while the budget deficit reached worrisome levels, Moldova did not have many possibilities of obtaining money to remedy the situation rather than negotiating a program with the IMF,” said Tokhir Mirzoev.

According to Tokhir Mirzoev, the Government successfully implements the program agreed with the IMF. The review of the last IMF mission to Chisinau proves this. As to the costs of the reforms planned in this program, the official said they can be diminished by implementing social policies orientated towards categories of people who are most likely to be affected. The IMF and other development partners help the authorities identify these policies.

As the Government intends to restore the tax on profit for companies from 2012, the journalists asked the official what reaction the potential foreign investors can have. “The proposal was submitted not by the IMF, but by the Government of Moldova. The possibility of imposing a common tax on the companies’ profit was discussed at the end of 2009 as a source of increasing the budget collections. We think the application of a tax of 12% will not affect the competitiveness of the Moldovan companies. As to the potential foreign investors, they take into account other factors too when they formulate their investment decision, for example the political stability, the attractiveness of the business and investment climate. Compared with other countries of the region, this tax is not high,” said the IMF Representative in Moldova.

The meetings of the Chisinau Press Club, organized now by the Committee for the Freedom of the Press, are held within the project “Let’s return to democracy! Strengthening the professional capacities of the journalists, strengthening governmental cooperation, promoting free mass media in Moldova” that is implemented by Konrad Adenauer Stiftung - KAS) – a German political foundation that promotes democracy and good governance in partnership with the Political Academy of the Austrian People’s Party (PolAk) and the Committee for the Freedom of the Press (CLP-Moldova). The project is financed by the European Union through the European Instrument for Democracy and Human Rights.

Introduction of the profit tax in Moldova will not affect the country’s
investment climate, - Tokhir Mirzoev.

The IMF Mission in Moldova Representative said it during the meeting of
the Press Club. He said the necessity of introducing the tax profit had
been discussed as early as signing the Memorandum of Moldova with the
IMF, that is why this news should not be unexpected for the business
environment. Tokhir Mirzoev stressed that this measure is aimed at
supporting the country’s budget and by no means will affect Moldova’s
investment attractiveness. “The system of encouraging investors,
providing different preferences and tax ease to them needs to be
abandoned. Investors should be attracted by simple, comprehensible rules
and transparent conditions”, said the IMF Representative in Moldova,
noting that the profit tax proposed by the Ministry of Finance in the
amount of 12% is one of the lowest in the region. As it was reported
earlier, the zero profit tax rate has been applied in Moldova since
2007. This measure, along with the capital amnesty, aimed to increase
capitalization of the country’s economy, to intensify the investment
process, to cut inflation, to legalize shadow economy. The single rate
of the profit tax in the amount of 12% will be introduced in Moldova
starting from January 1, 2012. // 06.06.2011 – InfoMarket.