Moldova abolishes tax breaks for Transdniestria, sets up 'convergence fund'

CHISINAU. March 26 (Interfax) - The Moldovan parliament on Thursday adopted in its first reading a bill on the gradual abolition of tax and customs benefits enjoyed by economic entities in Transdniestria, an Interfax correspondent reported.

The authors of the bill, from the ruling Action and Solidarity party, said the changes would ensure the gradual "introduction of a unified tax and customs regime throughout the Republic of Moldova, including for legal entities and individuals from the eastern regions of the country."

Chair of the Parliamentary Economy, Budget and Finance Committee Radu Marian said that the authorities would gradually abolish tax and duty exemptions for imported goods, with decisions being made through government decrees. The categories affected include alcohol, wine, beer, cigarettes, metals, and natural gas.

The law will be implemented in stages: this year, tax breaks for non-essential goods, such as alcohol, will be scrapped.

Also on June 1, 2026, the VAT exemption for gas supplies by Moldovagaz to Tiraspoltransgaz will be abolished.

As a result of the law's implementation, VAT and excise taxes will apply to the import and sale of these goods "in the regions on the left bank of the Dniester, as in the rest of the country," the document said.

The measures will be applied unilaterally, and all goods of Transdniestrian origin entering "the territory controlled by constitutional authorities" will be taxed, "regardless of the Tiraspol administration's position," Marian said.

He added that there has been no official response from the Transdniestrian authorities yet.

At the same time, according to the bill, starting January 1, 2030, there are plans to ensure a fully unified application of taxation on both banks, which "will place all importers on an equal footing, eliminating excess profits obtained through tax evasion, which often fueled unconstitutional entities."

The authors of the document calculated that the full implementation of these measures would bring 3.3 billion lei (approximately $180 million) into the state budget annually. These funds will be channeled to the Convergence Fund, a special fund for Transdniestria's economic reintegration, the creation of which is also envisaged by the bill.