{"id":247432,"date":"2007-12-19T17:10:00","date_gmt":"2007-12-19T17:10:00","guid":{"rendered":"http:\/\/new.moldova.org\/2007\/12\/19\/tax-privileges-only-insufficient-for-creating-favorable-business-environment-82086-eng\/"},"modified":"2007-12-19T17:10:00","modified_gmt":"2007-12-19T17:10:00","slug":"tax-privileges-only-insufficient-for-creating-favorable-business-environment-82086-eng","status":"publish","type":"post","link":"https:\/\/www.moldova.org\/en\/tax-privileges-only-insufficient-for-creating-favorable-business-environment-82086-eng\/","title":{"rendered":"Tax privileges only insufficient for creating favorable business environment"},"content":{"rendered":"Reading Time: <\/span> 2<\/span> minutes<\/span><\/span>

The introduction of the zero tax rate on enterprises’ reinvested profits cannot artificially create an attractive economic climate, Economist Anna Popa, who presented the study on direct foreign investments in the Moldovan national economy and their prospects in the contest of the neighborhood with the EU” on Tuesday said. <\/p>\n

She remarked that tax privileges cannot set off the lowered level of the country’s industrial base, its obsolete infrastructure or the absence of this infrastructure, and, moreover, problems of political and macro-economic instability. <\/p>\n

“These are the aspects, which are analyzed by foreign businessmen, when they must take decisions on making investments in one or other country”, the author said. <\/p>\n

In her opinion, the tax privileges will play their role at the second stage of taking investment decisions. <\/p>\n

“Potential investors take into consideration not only the profit tax, but also other taxes, duties and contributions, including fairly considerable social taxes. On the other hand, the privileges, granted to investors call for a diversification. For example, in the Czech Republic after the exemption of investors from the profit tax for ten years, they receive for investments, exceeding $10 million, grants for creating jobs, re-training of personnel, and a possibility to acquire land plots at reduced price is given to them. Unfortunately, in our country foreign investors are not allowed to buy agricultural land plots”, the economist said. <\/p>\n

The study states that the privatization process in Moldova used only 1\/3 of direct foreign investments. The failure to privatize such large enterprises as Moldtelecom and Tutun CTC resulted in the fact that the country lost its investment attractiveness for foreign businessmen. <\/p>\n

The study’s main recommendations concern the improvement of the investment climate, liquidation of bureaucracy and non-transparency in the activities of state institutions, promotion of Moldova’s positive image abroad. <\/p>\n

According to the study’s data, in 2001 the share of direct foreign investments in the Moldovan national economy constituted USD 100.57 million, in 2006 – USD243 million and in the first half of 2007 – USD205 million. The most considerable part of foreign investments fell on the authorized capital, followed by re-invested profits. There are currently 5896 registered enterprises with the participation of foreign capital – 4.17% out of the total number of the enterprises, included into the state register.  \/\/ Infotag<\/p>\n","protected":false},"excerpt":{"rendered":"

Reading Time: <\/span> 2<\/span> minutes<\/span><\/span>The introduction of the zero tax rate on enterprises\u2019 reinvested profits cannot artificially create an attractive economic climate, Economist Anna Popa<\/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-247432","post","type-post","status-publish","format-standard","hentry","category-economy"],"content_social_share":"Reading Time: <\/span> 2<\/span> minutes<\/span><\/span>

The introduction of the zero tax rate on enterprises’ reinvested profits cannot artificially create an attractive economic climate, Economist Anna Popa, who presented the study on direct foreign investments in the Moldovan national economy and their prospects in the contest of the neighborhood with the EU” on Tuesday said. <\/p>\n

She remarked that tax privileges cannot set off the lowered level of the country’s industrial base, its obsolete infrastructure or the absence of this infrastructure, and, moreover, problems of political and macro-economic instability. <\/p>\n

“These are the aspects, which are analyzed by foreign businessmen, when they must take decisions on making investments in one or other country”, the author said. <\/p>\n

In her opinion, the tax privileges will play their role at the second stage of taking investment decisions. <\/p>\n

“Potential investors take into consideration not only the profit tax, but also other taxes, duties and contributions, including fairly considerable social taxes. On the other hand, the privileges, granted to investors call for a diversification. For example, in the Czech Republic after the exemption of investors from the profit tax for ten years, they receive for investments, exceeding $10 million, grants for creating jobs, re-training of personnel, and a possibility to acquire land plots at reduced price is given to them. Unfortunately, in our country foreign investors are not allowed to buy agricultural land plots”, the economist said. <\/p>\n

The study states that the privatization process in Moldova used only 1\/3 of direct foreign investments. The failure to privatize such large enterprises as Moldtelecom and Tutun CTC resulted in the fact that the country lost its investment attractiveness for foreign businessmen. <\/p>\n

The study’s main recommendations concern the improvement of the investment climate, liquidation of bureaucracy and non-transparency in the activities of state institutions, promotion of Moldova’s positive image abroad. <\/p>\n

According to the study’s data, in 2001 the share of direct foreign investments in the Moldovan national economy constituted USD 100.57 million, in 2006 – USD243 million and in the first half of 2007 – USD205 million. The most considerable part of foreign investments fell on the authorized capital, followed by re-invested profits. There are currently 5896 registered enterprises with the participation of foreign capital – 4.17% out of the total number of the enterprises, included into the state register.  \/\/ Infotag<\/p>\n

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