EaP GREEN: Product-related environmental charges (taxes) in the Republic of Moldova


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This presentation looks at product-related environmental charges (taxes) in the Republic of Moldova, including the legal and institutionl framework, a list of taxable environment-related products, and details of the environmental tax reform in Modova. Presentation delivered at the meeting on "Economic instruments for greener products in the EU Eastern Partnership countries" (EaP GREEN programme).

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EaP GREEN: Product-related environmental charges (taxes) in the Republic of Moldova

  1. 1. Ministry of Environment of the Republic of Moldova Product-related environmental charges (taxes) in the Republic of Moldova Tatiana Plesco, Policy Analysis, Monitoring and Assessment Department 6-7 March 2012, Paris
  2. 2. Legal and institutional framework  Introduced by: Environmental Pollution Charge Law No. 1540 of 25 February 1998, as amended.  Rationale: Products difficult to destroy or recover, whose production and use is governed by international conventions or by domestic laws or regulations are subject to the tax  Payees: Legal entities and natural persons which put such products on the market in the Republic of Moldova  Fee rate: Percentage of product price at the point of importation  Responsible authorities: Customs Service  NEF generation: Taxes on imported products (“environmentally harmful products”) are the main source of funds for NEF, about 90% of the total revenue
  3. 3. List of taxable products  Ozone-depleting substances  Petrol (leaded, unleaded), kerosene  Diesel fuel (depending on sulphur content)  Furnace oil (depending on sulphur content)  Paints and varnishes on the basis of acrylic and vinyl polymers  Plastic products designed for transportation or packaging  Rubber tyres (new or restored ones)  Batteries and accumulators  Electric bilbs (fluorescent, mercury or sodium, halogen)  Paper, cardboard, cellulose wool  Plastics and plastic items  Asbestos  Fertilizers (phosphorus, nitrogen, potassium)  Insecticides, herbicides, growth promoters  Motor vehicles, used and others.  Plastic or tetra-pack packaging for imported products (excluding dairy products)
  4. 4. NEF revenues, 2000-2012 (mln. MDL)
  5. 5. Taxes on environmentally harmful products as share of total tax revenues, % 0 1 2 3 4 5 6 7 8 2008 2009 2010 2011 2012 environmental taxes motor vehicle import duty excise taxes on fuel
  6. 6. Next Steps Environmental tax reform is planned in three areas within the framework of the GEF project (2012-2014):  Reform of environmentally harmful subsidies and environmental taxes/ charges  Capacity building in environmental tax reform to achieve consensus among all the stakeholders  Integrating environmental tax reform in planning processes at the central and local levels  “Creating Market Incentives for Greener Products” Policy Manual for Eastern Partnership countries
  7. 7. Environmental Tax Reform (1)  Analyse efficiency of existing environmental taxes  Develop a detailed concept paper on environmental taxes/charges which would address environmental issues as much as possible in compliance with the WTO rules and based on international best practices  Interact closely with the Ministry of Economy, Ministry of Finance, including the Customs and Tax Services, and Producers and Importers Association (Environmental Tax Reform Commission)  Draft laws for a new framework for environmental taxes/charges  Revise the procedure for funding projects from the National Environmental Fund
  8. 8. Environmental Tax Reform (2) The short-term plans include reforms of pollution charges (for air emissions, wastewater effluents and disposal of production and consumption waste)  Pollution charges (taxes) should be set for a minimal number of pollutants which lend themselves to monitoring  The charges should be simplified to reduce the administrative burden  The charge (tax) rates should be revised taking account of environmental objectives as well as regularly updated to account for inflation
  9. 9. Environmental Tax Reform (3) The following measures are planned for the long run:  Reduce the list of products subject to environmentally related fees (taxes)  Substantiate the introduction of product-related fees (taxes) by clear environmental criteria  Set a single environmentally related product tax for domestic producers and importers  Revise fee (tax) rates, taking into account environmental objectives  Shift environmentally related tax rates from a percentage of the product price to the amount per unit or quantity of product  Shift from the existing packaging fees to an integrated packaging management framework in compliance with the European legislation
  10. 10. Environmental Tax Reform (4)  Draft a stand-alone packaging regulation based on extended producer/importer responsibility principles (integrated waste packaging management framework). The management framework will include: – Packaging fee differentiation by packaging type and size – Phasing in targets for processing various types of packaging (plastic, metal, wood, etc.) – Reporting system for the amount of imported or produced packaging for each producer or importer – Standard labeling system for packaging of domestically produced and imported products – Recovery system for certain packaging etc.  In the future, such systems will be designed to manage other product categories  Implement a deposit-refund system
  11. 11. Ministry of Environment of the Republic of Moldova Thank you plesco@mediu.gov.md