Moldovan Finance Minister defends poultry VAT reduction amid industry protests

Moldovan Finance Minister Victoria Belous has defended a proposal to reduce the VAT rate to 8% for poultry meat, despite strong opposition from domestic meat processors. The Minister argues that the measure will not create risks for local producers or unfairly stimulate imports, noting that both local and imported processed poultry would be taxed identically.

Industry representatives, including Eugeniu Salcuțan of the Meat Processing Enterprises Patronage, warn that the differentiated VAT rates could destabilize the domestic market. They argue that reducing VAT for poultry to 8% while maintaining a 20% rate for pork creates an artificial price gap of approximately 11.1% between substitutable products. Processors also claim the policy could favor imports and lead to significant VAT accumulation for local companies, as live birds would be taxed at 20% while the resulting meat is taxed at 8%.

Minister Belous responded to concerns regarding cash flow, stating that companies have mechanisms to manage VAT imbalances and that most should not face excessive accumulations of refundable VAT.