The Impact of Taxes and Duties on the Economic Development of the Republic of Moldova

Abstract

In the Republic of Moldova, taxes and duties serve as the main instruments for ensuring public revenue and supporting socio-economic development. This paper examines the structure of the national tax system, distinguishing between direct and indirect taxes, and analyzes their influence on economic performance, business competitiveness, and the standard of living. Emphasis is placed on the simulated fiscal impact on a company in the retail sector, illustrating how changes in profit tax rates and VAT affect net income, investment behavior, and overall financial performance. Furthermore, the study discusses how tax policy influences key areas such as consumption, labor costs, foreign investment attraction, and the informal economy. Particular attention is given to the balance between the state's revenue needs and the importance of maintaining a business-friendly fiscal climate. The findings highlight the need for coherent, predictable, and fair fiscal policies that stimulate growth, reduce inequalities, and strengthen long-term financial sustainability. The role of taxation is not limited to revenue collection but extends to shaping economic behavior, supporting public trust, and building a resilient fiscal framework. CZU: 336.22:338.1(478); JEL: G18, G28, G38, G53