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The history of Tax Service


For decades the local tax system has developed parallel to the one of the USSR under the same laws, principles and regulations, comprising both rights and duties, responsibilities of tax inspectorates. In MSSR, as in the USSR, was established a strictly centralized system for calculation and collection to the budget of taxes and other payments received from state enterprises and organizations, agricultural and production cooperatives, as well as from population.

The first document attesting the creation of town and territorial state tax inspectorates is the one with number 68 of March 1990, approved by the Soviet of Ministers of the MSSR. At that time, under the Ministry of Finance, certain tax subdivisions have started their activity, but these did not enter in the composition of local financial bodies.

Since 1991, own tax legislation began to be applied in the republic, taking into account the specificity of the economy and the national budgetary interests. On 15th of February, for example, the Supreme Soviet adopted the Law on priorities of social development of the village and agro-industrial complex, which provide the peculiarities of enterprises’ benefit taxation accompanied by a list of additional facilities, granted to these households.

In April 1992 the Law on Foreign Investment was adopted. Thus, a series of exemptions from benefit tax for joint ventures with foreign investment was provided. Afterwards, some changes that have greatly simplified the order of granting them were introduced. Beside this, the joint ventures take advantage of the basic exemptions which are provided for domestic enterprises.

On 17th of November, 1992, the Parliament adopted the Law on the basis of the tax system. This law determined the economic, legal and general organizational principles of the tax system constitution, provided the types of taxes and competence of state bodies, taxpayers rights and obligations, rights, obligations and responsibilities of the tax authority, protection of taxpayers, liabilities for law violations. This law was similar to the Russian one. The tax system was voluminous providing for 10 general state taxes and 10 local, whose number has increased further.

Since 2nd of December, 1992, the Law on the enterprises’ benefit tax has come into force. All economic agents - legal persons of the Republic were subject to tax, regardless of forms of ownership and legal framework, including enterprises with foreign investments, international associations and organizations that carried out their business activity directly or through the permanent establishments and subsidiaries.

Agricultural enterprises, except those of industrial type, did not pay tax on benefit resulted from the manufacture and sale of agricultural production, and from the sale of production obtained after the industrial processing of own raw material. Benefits from non-agricultural activities and industrial type enterprises’ benefit were taxed under general principles.

The amounts for charity, supporting health care, cultural and educational institutions, physical education, amounting 2 percent of taxable benefit and 1 percent of balance benefit, transferred to the fund of social support of population were not subject to benefit tax.

The Law on Value Added Tax was implemented in November 1994. It provided an indirect state tax, applied to the sum of added value, formed at each stage of manufacture and sale of goods, execution of work and provision of services. Subject to tax were enterprises and citizens, including foreigners carrying out  entrepreneurial activities, except for citizens who earn an annual income from the sale of goods less than 400 minimum wages and the institutions financed from the budget. The tax rate was approved in amount of 20 percent of the volume of taxable transactions and could be precised by the Parliament when approving the budget for the next year.

At the end of December 1994, the Parliament has adopted the Law on excise duties. The excise duty is an indirect state tax, included in the price of goods (production) which is paid by the consumer. Payers were individuals and companies that were producing and selling goods subject to excise duty (not of the first necessity: alcoholic beverages, tobacco products, articles of precious metals with or without gems etc.).

Since 1995, excise duties have been established in fixed rates in monetary expression for a unit of goods subject to excise duty, instead of percentages applied before to the selling price.

Over the years, the Law on land tax and the taxation method, adopted in December 1992, has undergone some changes. The payers of this tax were individuals and legal persons - owners, possessors or beneficiaries of land. Initially, the tax rates were insignificant and differentiated, depending on the worthiness, and the kind of agricultural use.

Since 1995, agricultural enterprises started to pay a single land tax, which included real estate and road taxes, previously paid separately. In this connection, land tax rates have been increased. Real estate tax, according to the President’s Decree, began to be paid by all legal persons with fixed production and unproductive funds, as well as by the citizens - owners of buildings and constructions.

According to the Law on road tax dated June 1993, citizens began to pay certain payments for the exploitation of highways, different auto-constructions, for buying cars and other means of transport, transit tax and a special road tax. But since 1996, the Law on the Road Fund came into force.

For the entire fiscal system and beyond, the adoption of the Law on personal income tax has proved to be important. This law was repealed when the Titles I and II of the Tax Code came into force. And during the years, the tax rates as well as the amount of nontaxable income have been repeatedly changed.

Since 1997, the financial –tax policy related to the state revenues should have defined as precisely as possible, the constituting sources of budgetary funds that the state needs, methods of collection and the economic, social or of other nature objectives to be fulfilled by the instruments used in the process of financial resources mobilization. Thus, the Tax Code of the Republic of Moldova came into force, which at that time included only two titles: "General Provisions" and "Income Tax".

In 2005, the V Title of the Tax Code: "Tax administration" was approved.

Actually, there are nine titles of the Tax Code namely: general provisions, income tax, value added tax, excises, tax administration, real estate tax, local taxes, fees for natural resources and road taxes.

In 2006, by Government Decision no. 1208 from 20.10.2006 the Strategy for the Development of the State Tax Service for the years 2006-2010 was approved, marking a new development stage, meant to contribute to the tax administration foundation strengthening that was put the in previous years.

In order to optimize the administration of property tax in 2005-2007, were initiated works for elaboration of a new tax system concerning taxpayers by implementing the Automated Informational System "Fiscal Cadastre", which is currently a complex system developed in the Web technology base.

Another significant project elaborated by the State Tax Service, which provides an alternative method for submitting tax reports other than paper-based, namely in electronic way using digital signature, was the initiative to create AIS (automated informational system) "e-Declaration ". This project represents a remarkable step in facilitating the work with the taxpayers, and in winning their confidence. With the aim to inform the taxpayers, the official website: www.fisc.md was widely popularized, as well as the opportunities offered by it.

In 2009 the Automated Informational System - "Cash exchange operations records” has started to be used;

          - Was initiated the implementation of the second taxation stage for property with commercial and industrial destination, garages and allotments on which these are located and the fruit-growing associations allotments with or without buildings placed on them, based their estimated (market) value;

          - “Tax services portal” was launched. It  includes the service "Electronic declaration", the service "Quick declaration", and access to information services: "Download forms", "About the taxpayer", "Fiscal invoices", services of certification and issuance of digital signatures. Herewith, the “electronic counter” was launched which is meant to provide the electronic tax services. Also, the mechanism for taxpayers notification about the term of tax return and tax reports (fiscal calendar) submission was launched, as well as the notification about the receipt of tax return by the State Tax Service and errors in these declarations.

In March, 2010 the project “Electronic declaration for individuals” was launched. This service allows individuals to receive free of charge the digital signature for on-line submission of income tax return, without visiting the territorial fiscal body.

With reference to international cooperation, besides the bilateral cooperation relations, the State Tax Service is a member of two specialized international organizations:

- Coordinating Council of the Tax Services’ Heads from the Member States of the Commonwealth of Independent States (CCTSH),

- Intra-European Organization of Tax Administrations (IOTA).

It should be also noted that the State Tax Service cooperates under bilateral cooperation programs with the tax administrations from the Netherlands, France, Romania, Estonia, the Czech Republic, Lithuania, etc.

Forwards, the State Tax Service will direct its actions towards the achievement of basic objectives set out in various governmental programs, in the Development strategy of the State Tax Service and aiming to improve the tax administration activities.

In the context of the above mentioned, it is to be noted that so the present as the future of the State Tax Service is determined and directly influenced by the fiscal civism of taxpayers. Thus, through constant cooperation and support, provision of appropriate advisory and informative assistance, inclusive by providing new tax services helping to reduce the costs, new achievements concerning the taxpayers voluntary, aware and fair compliance on their tax obligations would be realized.

Over the years the fiscal system has undergone significant changes. The tax legislation improvement results that were recorded so far have proved the efficiency of the developed activities and the need to develop forwards, by alignment to international standards and revision of all the performance indicators, which define the overall activity of the State Tax Service.