Individual Entrepreneurs Taxation System Reform

The Supreme Council of the Pridnestrovian Moldavian Republic in the final reading in the course of the plenary session today adopted government legislations and a number of amendments made by the relevant parliamentary committee, which will reform the system of taxation of individual entrepreneurs. The reform is based on the principle of social justice: more income - more taxes. Amendments and additions were made to the laws "Special tax regime – simplified taxation system" and "Special tax regime – patent taxation system". They were presented to their fellow deputies by the head of the Committee on Economic Policy, Budget and Finance, Viktor Guzun in the course of the plenary session. This is an important issue according to him, as a new approach is being adopted, which establishes different rules for doing business in Pridnestrovie.

A tax reform for entrepreneurs was passed in Pridnestrovie in 2019. Three special tax regimes have been established. The self-employed are those who work full-time but have an occasional income from hobbies or side activities. Individual entrepreneurs patent holders – citizens whose professional activities are directly related to the conduct of their business and bring the main income. You can engage in various activities, acquiring a monthly patent for a fixed amount, regardless of income, while you can conduct foreign economic activity, hire employees, work experience is in progress, including for pensions. The third type is a simplified taxation system for individual entrepreneurs. An individual entrepreneur can hire up to 5 people, engage in foreign economic activity, while paying a tax of 3% on income received.

First of all, explaining the changes in the legislation, Deputy Viktor Guzun noted, the retail trade in food and non-food products is excluded from the patent system (the exception is trade on open counters, remote trade, trade at non-stationary points, etc.), a ban on individual entrepreneurs, working under the patent system, to interact with legal entities. Entrepreneurs working under the patent system will be prohibited from carrying out foreign economic activity, that is, importing goods to Pridnestrovie.

The current tax reform proposes to switch from a patent to a simplified taxation system for entrepreneurs working in the retail trade, in other types of activities removed from the patent system, and for those who want to continue importing goods from abroad in order to comply with the principle of fairness. They will pay a tax of 3% on the income received in this case. If you earned 10 thousand rubles a month – the amount is one, if the income is 1 million rubles for example – another accordingly. If there is no income at all, then you won’t have to pay, even for a patent as before. It is necessary to use cash registers (cash register or online cash register, as well as a thermal printer for issuing checks) when carrying out cash transactions in order for the income to be fixed, on the “simplified”.

The Committee on Economic Policy emphasized that the principle of fairness in the payment of taxes is necessary. This is especially important in the current difficult time, so that additional financial resources that will begin to flow into the republican budget are redistributed to ensure the social obligations of the state - pensions, benefits and wages for doctors, teachers and other public sector employees.

Changes to tax laws if signed by the PMR President of the will take effect from January 1, 2023.