OREANDA-NEWS. June 27, 2012. At a press conference of the National Confederation of Patronages of Moldova (NCPM) Speaker of the Administrative Board of Sudzucker Moldova Alexandr Coss noted that the reduced rate of VAT is not an incentive but a condition of surviving for the hole sugar beet branch of Moldova. If it is raised, the price for beet sugar made in Moldova will grow and the market will be exposed to cane sugar supplies, legal and illicit ones.

“According to our estimates, an amount of sugar contraband from Ukraine makes up about 5 to 7 t. a month. Believe us, Ukraine can in a romp fill the Moldovan market in with sugar” he said. According to Laexandr Coss, the initiative put forward by the Finance Ministry and approved by Cabinet Ministers has to be voted down in the Parliament as meaningless. As answering questions of reporters, representatives of the sugar beet branch remarked that production of raw sugar in Moldova is unprofitable too: “A small sugar-milling plant has to produce at least 150 thou t. of cane sugar to be profitable.

The domestic market makes up 60 to 70 thou. t. Besides, we export to EU only beet sugar”. Representatives of NCPM notes the fiscal policy measures offered are impermissible and will result to death of the branch, job destruction, devastation of agricultural lands, closures of companies and other fallouts. The Speaker of the Board of Sudzucker has supposed the company is to revise the concept of the business development in our country if the fiscal policy will become tougher.

“The company’s turnover in Moldova is only 0.6% of the total turnover of the Sudzucker concern. Losing Moldova as an industrial zone will not be tangible for the company. At the same time I am not confident that Moldova will not sense the loss of an investor whose annual turnover amounts to 1 bln leis”, Alexandr Coss voiced. As it was said earlier, the VAT sugar raise from 8% to 205 is stipulated by the draft fiscal law for 2013 approved by the government last week. Sugar is considered an intermediate product and not that of basic commodities. In great amounts it may be dangerous for health, the document runs.

The return to the standard rate of VAT is suggested to observe the principle of fair taxation of sugar producers and other producers of intermediate products. The sugar VAT raise has been recommended by IMF for the national fiscal policy.