{"id":242058,"date":"2007-04-11T11:01:00","date_gmt":"2007-04-11T11:01:00","guid":{"rendered":"http:\/\/new.moldova.org\/2007\/04\/11\/moldovan-president-s-speech-at-government-meeting-41516-eng\/"},"modified":"2007-04-11T11:01:00","modified_gmt":"2007-04-11T11:01:00","slug":"moldovan-president-s-speech-at-government-meeting-41516-eng","status":"publish","type":"post","link":"https:\/\/www.moldova.org\/en\/moldovan-president-s-speech-at-government-meeting-41516-eng\/","title":{"rendered":"Moldovan president s speech at government meeting"},"content":{"rendered":"Reading Time: <\/span> 6<\/span> minutes<\/span><\/span>

Esteemed government members, <\/p>\n

Last July, during the closing meeting of the parliament’ session, I submitted a series of proposals on the way we are to change the vector of our economic development. Today, I will resume the idea I set forth from the parliament’s rostrum at that time: if Moldova does not undertake radical, extraordinary measures, it has no chance to decisively speed up its economic development. This statement has never meant that I would have proposed to advance in breach of the economic rules. It means that, to a great extent, the way of the generally accepted rules has been simply exhausted. <\/p>\n

What are we currently ascertaining? The economic part of our legislation has been created and, in general, the fiscal code, the customs code, the laws on accountancy, on enterprises and entrepreneurship, on financial institutions, on the National Bank, the securities market have been stabilized. This normative framework has been so far under dynamic changes, targeting the correlation of its norms and regulations, which has been accomplished already. On the whole, the large-scale privatisation process has been completed; the action of the 1997 law has had its effect already. The mechanisms and institutions tasked with regulating the economic sectors and monopolies have been created. But, one way or another, all these steps have brought us precisely to where our Moldovan economy is now. <\/p>\n

\"\"A hasty analysis is enough to understand that our economic system needs a "doping". We have no resources so as to further extensively develop. We can no longer do in Moldova only what is used to be done everywhere, as if the concerned actions would be xeroxed. Time is ripe to adopt decisions which would take into account our peculiarities, including the political, geographical and mental ones. The time has come to adopt decisions designed to release our population’s spirit of entrepreneurship, routing it towards a dynamic creation process. <\/p>\n

I would like to highlight the period after the proclamation of the independence, was characterised by the existence of contradictions both within the economic legislation and in the process of its enforcement. We can say that this period has passed. It would be logical to leave in the past certain deviations from this contradictory legislation, and to focus our attention and efforts on the future. "The past should not suppress the future." Being clever just because you know what happened in the past and filing claims to the citizens and entrepreneurs for the fact that, during the quite confusing 1990s, they were trying to survive as they could, would mean proving excessively false principledness. This happened because in those years, the state and the power were behaving as if there were no citizens whatsoever, no economy and no responsibility for the future. Now, when we have put in order the tax levying system properly, when we have liberalised to as much as possible the framework of economic processes, when the state "has woke up", and acquired the proper sense of responsibility, we should get rid for good of this excessively troublesome legacy of the past. <\/p>\n

I will say that this legacy is not in the least inoffensive. <\/p>\n

First of all, as it is known, the particularly monstrous and extremely widespread phenomenon of underground economy appeared and developed during the 1990s. Its roots entered all the sectors. Ambiguity and lack of clear-cut market rules led to the fact that the entire country and all its citizens live in conditions of double accountancy. It is enough to cite a single example – the situation of the dwellings’ fund, when, on the one hand, there is the dwelling’s market price, a price known by everybody, and on the other hand, the concerned price can by no means be confirmed in documents. This is not only about the dwelling fund. This is about all the assets and all the means owned by our society as a whole. Hence, Moldova’s material sector is underestimated; the country’s capitalisation does not meet the official statistics. Not only the normal market mechanisms – mortgage, credit, capitals’ circulation – are paralysed, but also the mechanisms characteristic of a realistic social policy. The capital of the well-off people, of the middle class, of our citizens who work abroad is dead, it produces no new values, and what the state really allocates to support those who are in need does not reach them. <\/p>\n

Second, for many years, the state and the business have been playing "hide and seek" with each other whenever it came to "taxation" issues. But starting 2001, we embarked on the pathway of gradually diminishing the income tax, while concurrently strengthening the fiscal discipline. As a result, the income tax dropped from 32 to 15 per cent. This, certainly, has had its impact: the degree of levying taxes increased, and the enterprises’ discipline has enhanced. At the same time, new and new spirals of pursuing our entrepreneurs for their past "deals" have created an environment favourable to the appearance of a new wave of corruption, the end of which is some agreement reached between the control body and the enterprises they check. Is there any point in saying that each new "price" for such an agreement means money purloined from our economy, from our budget, from our future? Is there any point in saying that some of our state structures, through such actions, deprive our business environment of any incentives, of any wish to evolve? <\/p>\n

I have submitted to the parliament a set of three interdependent initiatives namely because of these circumstances. <\/p>\n

The first one deals with capital amnesty. Capital amnesty can impact all the citizens and all the enterprises from our country, with no exception at all. Amnesty regards all the capital forms – from money to real estate, from the share of participation in business to securities. Amnesty will be made on application basis. No matter the sum of the capital declared for amnesty, the state will legalise only five per cent of it. The money the state has amassed this way will be distributed as follows: half – to the state budget; half – to the social and health insurance budgets. <\/p>\n

The second initiative sees fiscal amnesty, which means that all the types of state taxes will be reprieved. We put a strong end to the past in this way. The state says to the business: we start a new life together, a life which is not burdened by past memories and conflicts. <\/p>\n

The third initiative is a new radical approach to the income tax got from entrepreneurship activity. According to this initiative, the income tax will be equal to zero for all the enterprises. The 15-per cent share will be applied from now on only to dividends, which means that the most important problem for us is the investments, the extension of the economic activity, increase in the degree of labour insertion, increase in salaries. Thus, the tax will be paid if the businessman decides to get dividends, i.e. to stop making his own investments, to remove his money from business, to use it for personal consumption. At the same time, the state gets the moral right to increase thrice the size of the sanctions applied against the committed fiscal frauds. I believe that it is fair to act this way! <\/p>\n

What are the expected effects, however? <\/p>\n

If we talk about macroeconomic effects, the main ones are: rising the Moldovan economy’s capitalisation, boosting the investment process and cutting inflation. If we talk about these measures effects on the business environment, they are as follows: the reduction of the underground economy, the shift of a good deal of the "black" circulation of liquidities to the official money circulation, the reduction of the area where corruption’s development is possible. The control bodies will allot forces and money to analyse the current situation so as to prevent contraventions and will cease dealing with "historical" investigations. Besides, state statistics’ reliability will considerably grow, and so will the truthfulness of decisions passed in the social and economic sectors. Certainly, the democratic institutions will be considerably consolidated and the process of the national middle class’ formation will be carried out more dynamically. <\/p>\n

Esteemed government members! <\/p>\n

I call on you to treat these initiatives with full responsibility. We will go to the parliament in ten days exactly. I rely on the fact that these ten days will be enough for our MPs and our entire society to assess the proportions and the irreversibility of changes that are being prepared. It is enough for us to live in conditions of double accountancy! Let’s no longer play "hide and seek". Double accountancy means double morals. And this, as it is known, means the lack of any morals. This extremely bad practice should be ceased once and forever, cut as the "Gordian knot". <\/p>\n

Reliability of the power, responsibility before the society, transparency of the legislation and freedom of the entrepreneurship – these should the symbols of a modern, European Moldova! <\/p>\n

Thank you for attention.<\/p>\n","protected":false},"excerpt":{"rendered":"

Reading Time: <\/span> 6<\/span> minutes<\/span><\/span>Moldovan president s speech at government meeting<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-242058","post","type-post","status-publish","format-standard","hentry","category-economy"],"content_social_share":"Reading Time: <\/span> 6<\/span> minutes<\/span><\/span>

Esteemed government members, <\/p>\n

Last July, during the closing meeting of the parliament’ session, I submitted a series of proposals on the way we are to change the vector of our economic development. Today, I will resume the idea I set forth from the parliament’s rostrum at that time: if Moldova does not undertake radical, extraordinary measures, it has no chance to decisively speed up its economic development. This statement has never meant that I would have proposed to advance in breach of the economic rules. It means that, to a great extent, the way of the generally accepted rules has been simply exhausted. <\/p>\n

What are we currently ascertaining? The economic part of our legislation has been created and, in general, the fiscal code, the customs code, the laws on accountancy, on enterprises and entrepreneurship, on financial institutions, on the National Bank, the securities market have been stabilized. This normative framework has been so far under dynamic changes, targeting the correlation of its norms and regulations, which has been accomplished already. On the whole, the large-scale privatisation process has been completed; the action of the 1997 law has had its effect already. The mechanisms and institutions tasked with regulating the economic sectors and monopolies have been created. But, one way or another, all these steps have brought us precisely to where our Moldovan economy is now. <\/p>\n

\"\"A hasty analysis is enough to understand that our economic system needs a "doping". We have no resources so as to further extensively develop. We can no longer do in Moldova only what is used to be done everywhere, as if the concerned actions would be xeroxed. Time is ripe to adopt decisions which would take into account our peculiarities, including the political, geographical and mental ones. The time has come to adopt decisions designed to release our population’s spirit of entrepreneurship, routing it towards a dynamic creation process. <\/p>\n

I would like to highlight the period after the proclamation of the independence, was characterised by the existence of contradictions both within the economic legislation and in the process of its enforcement. We can say that this period has passed. It would be logical to leave in the past certain deviations from this contradictory legislation, and to focus our attention and efforts on the future. "The past should not suppress the future." Being clever just because you know what happened in the past and filing claims to the citizens and entrepreneurs for the fact that, during the quite confusing 1990s, they were trying to survive as they could, would mean proving excessively false principledness. This happened because in those years, the state and the power were behaving as if there were no citizens whatsoever, no economy and no responsibility for the future. Now, when we have put in order the tax levying system properly, when we have liberalised to as much as possible the framework of economic processes, when the state "has woke up", and acquired the proper sense of responsibility, we should get rid for good of this excessively troublesome legacy of the past. <\/p>\n

I will say that this legacy is not in the least inoffensive. <\/p>\n

First of all, as it is known, the particularly monstrous and extremely widespread phenomenon of underground economy appeared and developed during the 1990s. Its roots entered all the sectors. Ambiguity and lack of clear-cut market rules led to the fact that the entire country and all its citizens live in conditions of double accountancy. It is enough to cite a single example – the situation of the dwellings’ fund, when, on the one hand, there is the dwelling’s market price, a price known by everybody, and on the other hand, the concerned price can by no means be confirmed in documents. This is not only about the dwelling fund. This is about all the assets and all the means owned by our society as a whole. Hence, Moldova’s material sector is underestimated; the country’s capitalisation does not meet the official statistics. Not only the normal market mechanisms – mortgage, credit, capitals’ circulation – are paralysed, but also the mechanisms characteristic of a realistic social policy. The capital of the well-off people, of the middle class, of our citizens who work abroad is dead, it produces no new values, and what the state really allocates to support those who are in need does not reach them. <\/p>\n

Second, for many years, the state and the business have been playing "hide and seek" with each other whenever it came to "taxation" issues. But starting 2001, we embarked on the pathway of gradually diminishing the income tax, while concurrently strengthening the fiscal discipline. As a result, the income tax dropped from 32 to 15 per cent. This, certainly, has had its impact: the degree of levying taxes increased, and the enterprises’ discipline has enhanced. At the same time, new and new spirals of pursuing our entrepreneurs for their past "deals" have created an environment favourable to the appearance of a new wave of corruption, the end of which is some agreement reached between the control body and the enterprises they check. Is there any point in saying that each new "price" for such an agreement means money purloined from our economy, from our budget, from our future? Is there any point in saying that some of our state structures, through such actions, deprive our business environment of any incentives, of any wish to evolve? <\/p>\n

I have submitted to the parliament a set of three interdependent initiatives namely because of these circumstances. <\/p>\n

The first one deals with capital amnesty. Capital amnesty can impact all the citizens and all the enterprises from our country, with no exception at all. Amnesty regards all the capital forms – from money to real estate, from the share of participation in business to securities. Amnesty will be made on application basis. No matter the sum of the capital declared for amnesty, the state will legalise only five per cent of it. The money the state has amassed this way will be distributed as follows: half – to the state budget; half – to the social and health insurance budgets. <\/p>\n

The second initiative sees fiscal amnesty, which means that all the types of state taxes will be reprieved. We put a strong end to the past in this way. The state says to the business: we start a new life together, a life which is not burdened by past memories and conflicts. <\/p>\n

The third initiative is a new radical approach to the income tax got from entrepreneurship activity. According to this initiative, the income tax will be equal to zero for all the enterprises. The 15-per cent share will be applied from now on only to dividends, which means that the most important problem for us is the investments, the extension of the economic activity, increase in the degree of labour insertion, increase in salaries. Thus, the tax will be paid if the businessman decides to get dividends, i.e. to stop making his own investments, to remove his money from business, to use it for personal consumption. At the same time, the state gets the moral right to increase thrice the size of the sanctions applied against the committed fiscal frauds. I believe that it is fair to act this way! <\/p>\n

What are the expected effects, however? <\/p>\n

If we talk about macroeconomic effects, the main ones are: rising the Moldovan economy’s capitalisation, boosting the investment process and cutting inflation. If we talk about these measures effects on the business environment, they are as follows: the reduction of the underground economy, the shift of a good deal of the "black" circulation of liquidities to the official money circulation, the reduction of the area where corruption’s development is possible. The control bodies will allot forces and money to analyse the current situation so as to prevent contraventions and will cease dealing with "historical" investigations. Besides, state statistics’ reliability will considerably grow, and so will the truthfulness of decisions passed in the social and economic sectors. Certainly, the democratic institutions will be considerably consolidated and the process of the national middle class’ formation will be carried out more dynamically. <\/p>\n

Esteemed government members! <\/p>\n

I call on you to treat these initiatives with full responsibility. We will go to the parliament in ten days exactly. I rely on the fact that these ten days will be enough for our MPs and our entire society to assess the proportions and the irreversibility of changes that are being prepared. It is enough for us to live in conditions of double accountancy! Let’s no longer play "hide and seek". Double accountancy means double morals. And this, as it is known, means the lack of any morals. This extremely bad practice should be ceased once and forever, cut as the "Gordian knot". <\/p>\n

Reliability of the power, responsibility before the society, transparency of the legislation and freedom of the entrepreneurship – these should the symbols of a modern, European Moldova! <\/p>\n

Thank you for attention.<\/p>\n

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