Activity of the Government on September 13–26, 2004

Reshuffles

During the period covered Mihail Stirban was ousted from his position as Deputy Director of the Department of Constructions and Territory Planning as was Gheorghe Stratan from his position as Counsellor to Senior Deputy Prime Minister.

Decisions

To enforce provisions of Article 163 (2) of the Code on Science and Innovation no. 259-XV of 15 July 2004, Government decreed on establishing State Intellectual Property Agency by merging State Agency for Protection of Industrial Property and State Copyright Agency.
On September 17, Government decided on establishing a committee entrusted to oversee and monitor the census due in October. The committee shall also oversee the enforcement of the Memorandums of Understanding signed with SIDA, DFID and Council of Europe that provided financial support for the census.
In the eyes of many observers there is a direct link between statements made by the Russian and Ukrainian Presidents at the Astana CIS Summit condemning economic restrictions imposed by Chisinau on Tiraspol and adoption of a draft amendment to Article 121 Title IV of the Fiscal Code. Under the said amendment alcohol beverages imported from non-WTO countries shall be subject to excises. Other experts say WTO has long insisted on such an amendment and it has nothing to do with the Summit.
An excise worth 10 Lei per litre shall be applied to imported beer, champagne, as well as other grape beverages, while a 12.5 Lei excise shall be applied for imported vermouth and other aromatic beverages. Currently, 1 Lei excise is applied on imported beer, as for other drinks it is 10% of the cost, however no less than 1.50 for vermouth or 2.50 Lei per litre. An excise of 30 Lei per litre shall be applied for ethylic alcohol.
If approved by the Parliament, a price hike on alcoholic beverages imported from other than WTO countries is to be expected, while their market share would drop.
Most importantly, Government endorsed the Law on State Budget for 2005. It envisages a 6% GDP growth up to 36.7 billion Lei, 8.9% inflation rate and 12.7 Lei per 1 USD exchange rate.
Budget revenues are estimated at 7,473 million Lei (836.8 million Lei or 12.6% over indicators forecasted for 2004). Budget expenses for 2005 are estimated at 7,724 million Lei (704.5 million Lei or 10% over the indicators approved in 2004), with a 251 million Lei deficit, out of which 100 million are to be covered from the sale of T-bills.
An amount of 1 billion 35 million Lei is to be allocated for healthcare, 224.3 million more than in 2004. Education shall receive 428 million (as compared to 386 m in 2004), law enforcement — 450.7 m Lei, National Army — 115.7 m Lei (as compared to 112.6 m in 2004), justice — 95 m Lei (82 m in 2004), and diplomatic missions — 110.4 m Lei (as compared to 107.5 m in 2004).
Draft budget for 2005 includes some innovations, the most important being new taxes; a 336 m Lei reserve fund for the gradual enforcement of the Law on calculating salaries and indemnities to public officers; a 65 m Lei fund for wine yards, etc.
Yet another Government motion endorsed the draft social insurance budget for 2005. It provides for revenues worth 3 billion 485.9 m Lei, i.e. 710 m Lei more than in 2004. Under the draft, farmers and those working their own plots, would have to pay a fixed social contribution worth 744 Lei. Experts say it would have been fair to calculate them similarly to this year based on the land fertility.
The document also addresses the interests of Moldovan citizens working abroad, who may pay 1,374 Lei to be entitled to state pension. Migrant workers would be allowed to pay the social contribution for the past years, but for no more than 5 years.
In the next year, employers should pay 27% of the salary, while employees 2% of the net salary to the social insurance fund.

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Activity of the Government on September 13–26, 2004

Reshuffles

Decisions

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