The personal income tax will be reduced by introducing the single rate and increasing twice the annual personal exemption. The announcement was made by Prime Minister Pavel Filip after the meeting of the Democratic Party of Moldova.
"In today's meeting we have discussed various initiatives to increase the quality of people's lives, but also to improve the business environment. The tax reform component contains important changes in wage taxation, which will be possible because we will reduce the income tax on people from 18 percent to 12 percent, by introducing the single rate.
The decision was also made to reduce the employer's contribution to the State Social Insurance Budget by 5% (it is exclusively the private sector), from 23 to 18%, "said Pavel Filip.
Additionally, according to the head of the Excutive, the tax reform will double the annual personal exemption from 11,280 lei, up to 24,000 lei.
"Citizens who receive a salary of up to 2,000 lei a month will no longer pay taxes. The measures we are talking will bring an increase in the employee's income by 6% and for employer - 5%. Lots of money will remain in people's pockets", Pavel Filip stressed.
Pavel Filip also said that the tax reform will reduce the VAT rate from 20% to 10% for services from the HORECA industry including restaurants, hotels and cafes.