BRITE YEAR 4 SECOND QUARTER REPORT JANUARY - MARCH 2016

BRITE worked closely with several advisers to the Prime Minister on economic issues to include a number of reforms in the PM's "100-day Plan". The new Finance Minister, Octavian Armas, engaged with the business community to obtain their feedback on the pending Fiscal Policy law for 2016, resulting in the inclusion of delayed customs payments into the draft law. The new Minister of Economy, Octavian Calmic, and his deputy, Vitalie Iurcu, drove the business environment reform agenda, leading to the approval of BRITE-supported legislation on internal trade permits and local acts. BRITE completed an analysis of the tax gap in Moldova and is working with the State Tax Service (STS) to build their capacity to perform these tax gap studies in the future. The communications team finalized an internal communications strategy for the Moldova Customs Service and is working to implement aspects of it related to risk management and the development of an intranet system within the Moldova Customs Service. The Update Moldova campaign covered three new reforms and continues to be well-received by both the private sector and the general public. Component 1 of the project focused on Tax Administration and Trade Facilitation. BRITE supported the STS to enhance the Taxpayer Online Current Account, which has been largely completed. The functionality of issuing the e-certificate was developed under the Current Account and trialed in three authorities: the Ministry of Finance, the Ministry of Agriculture, and Chisinau town hall. The STS is concluding agreements with these institutions to grant them access to the Current Account for the purpose of issuing Taxpayer Tax Clearance Certificates. BRITE also assisted the STS to enhance its risk management capabilities and reduce unnecessary interventions. A one-week workshop was conducted to review the top-down tax gap analysis, which estimated Moldova's tax gap at 20% of GDP. The team was tasked with revising their bottom-up tax gap analysis for corporate taxes and excise taxes for tobacco and fuel. Implementing the Single Taxpayer Account was also a key activity, with BRITE finalizing an open tender to develop the single account and concluding a contract with the selected contractor, DAAC Systems. The new Government moved quickly to advance stalled reforms, including the F2016 Fiscal Policy law that includes a number of BRITE-supported amendments and provisions to facilitate trade. The law passed the Government and through all parliamentary committees and should be presented for first reading in early April. Other initiatives related to customs valuation, streamlining customs procedures in Free Economic Zones, and new rules on the integrated tariff TARIM are on the Government's agenda and should be approved soon.