A Temporary “Lifebuoy” or Tax Evasion and a Risk of Corruption? The Saga of the Entrepreneur’s Patent
Automatically translated summary. The full text is available in Romanian.
A commentary supported by NED argues that Moldova’s entrepreneur’s patent for retail trade, created as a temporary tool when tax institutions were weak, has outlived its purpose. It examines the risks of tax evasion and corruption, repeated extensions of the patent, and the alternative regime of independent activity, as of December 2022.
Patent holders do not register with the state, keep no accounting records and issue no fiscal receipts, which the National Anticorruption Centre (CNA) linked in 2016 and 2018 to corruption, tax fraud, unfair competition and weak consumer protection. The patent’s validity has been extended repeatedly, most recently by a draft law proposing 1 July 2023, although Finance Minister Dumitru Budeanschi said retail patents should be abolished.
Since 2017, independent activity has offered an alternative: income tax of 1% of sales, at least MDL 3,000, with cash registers. By 30 November 2022 there were 1,961 such activities, while retail patents fell from 18,556 in 2015 to 5,630 in 2021 and patent revenue from MDL 30.3 million to MDL 4.52 million. The authors recommend promoting independent activity, moving away from the patent, stricter risk-based controls, better consumer protection and transition support.
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