Recent Developments and Prospects of Excise Tax Revenues Related to Products Imported into the Republic of Moldova

Abstract

Moldova’s participation in Customs and Fiscalis programmes is an important step in further strengthening operational cooperation in the areas of customs and taxation and is emblematic of the mutual commitment towards closer ties. The Customs programme also promotes cooperation between authorities, particularly through its support for the development and operation of the central IT systems for EU customs. The programme helps customs administrations to deal more efficiently with increasing trade flow and emerging trends and technologies, while providing a better response to security threats.[3] Starting with July 1, 2024, the Customs Service launched the first transit operations at the national level in the NCTS (New Computerized Transit System) system, and from October 1, 2024, a single electronic system is used in the Republic of Moldova for submitting transit declarations. [7] Customs harmonisation and the adoption of the system make the import process (and therefore the collection of excise duties on imports) more transparent, predictable and efficient. This can influence the volume of imports, compliance costs and the potential for evasion. At the same time, in the context of tax harmonisation with the EU (and especially for excisable products such as tobacco, alcohol, energy products) there is an obligation to align with EU standards — which may change the tax base, excise duty rates, or the way of administration. The Republic of Moldova has committed to progressively harmonizing its national legislation with that of the European Union, in accordance with Annex VI to Chapter 8 (Taxation) of Title IV of the Association Agreement between the Republic of Moldova and the European Union. In this regard, the Ministry of Finance has developed a draft amendment to Title IV of the Tax Code no. 1163/1997.The provisions will regulate harmonised excise duties, which are special taxes levied directly or indirectly on the consumption of the following products: alcohol and alcoholic beverages; processed tobacco and energy products and electricity. Excisable products will be subject to the excise duty regime at the time of their production, including, where applicable, at the time of their extraction; their import or their irregular entry into the customs territory. [6] UDC: 339.543.36(478); JEL: H27, H71, H72