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).

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. 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. 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. NEF revenues, 2000-2012 (mln. MDL)

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. 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. 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. 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. 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. 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. Ministry of Environment of the Republic of
Moldova
Thank you
plesco@mediu.gov.md