Moldova's 2020 state budget rectified

Chisinau, 23 April /MOLDPRES/ - The amendment of the state budget law for 2020 was approved by the parliament in two readings at a plenary meeting today. The basic factors which prompted the amendments made to the state budget deal with the impact of COVID-19 on the national economy.     

Following the amendments, the state budget revenues will decrease by about 6.34 billion lei or 14.3 per cent against the revenues initially approved and will amount to 37.798 billion lei. The cutting in the revenues is triggered mainly by the drop in duties and taxes, as well as in incomes from subsidies.    

At the same time, the expenses will increase by 2.22 billion lei (1.6 per cent), by the use of instruments of the budgetary and fiscal policy, and will amount to 53.773 billion lei.  

The revised budget deficit will stand at 15.975 billion lei.

The cabinet will change the structure of the sources of financing of the budget deficit, taking into account the changes received at the entrances of foreign loans, especially the emergency ones, meant for combating the effects of COVID-19, including on behalf of IMF, Russia, World Bank, Council of Europe Development Bank.     

Attending the meeting, Prime Minister Ion Chicu stressed that all rectifications approved had been coordinated with the International Monetary Fund.

Proceeding from the priorities of expenses on the current period, the most important measures which need essential spending from the state budget refer the support of the health sector and attenuating the effects of the COVID-19 pandemic on the economy and the residents. On this purpose, decision-makers propose the following measures: financing measures of combating COVID-19, including the purchasing of protection equipment, endowing the hospitals with equipment and medical devices, re-equipment of medical rooms and other critical expenses; increase in the volume of the unemployment fund 6-fold and increase in the budget of the National Employment Agency, increase in the allocations for the Social Benefit; providing subsidies to the economic agents which carry out salary payments on the crisis period; establishment of the programme on the subsidization of interests on the credits borrowed by economic agents, establishment of the programme on the reimbursement of the value added tax (VAT), meant for the next period, filling the government’s intervention fund for the management of the epidemiological situation; creation of a centralized fund for managing the risks of insufficiency of allocations for staff expenses and compensation of the incomes missed by the local public authorities, etc.        

The document provides for investment projects and measures for stimulating the business environment, such as the cutting of the VAT share from 20 to 15 per cent for the HoReCa sector starting from 1 May 2020, improvement of roads’ infrastructure nationally and locally, providing of loans through commercial banks on easy terms for micro-, small and medium-sized enterprises, measures of backing the licence holders and private entrepreneurs.    

Also, the cabinet proposes the increase of the government’s intervention fund for urgent expenses given COVID-19, including for the needs of the mandatory health insurances accounts; creation of the fund for covering the salary payment necessities; partial covering of the incomes of the missed revenues of the component budgets of the national public budget.