Chisinau canceled tax breaks for Transnistria and announced its intention to improve the lives of Transnistria with the help of the Convergence Fund, which will receive Transnistrian taxes. In Tiraspol, in response, they announced Chisinau’s desire to impose “extortions” on the Left Bank and the risk of a collapse of the Transnistrian economy. NM figured out how the introduction of taxes will affect the economy and residents of Transnistria, and is everything really that bad there?
Tiraspol deprived of benefits
At the end of April, the Moldovan parliament approved a bill abolishing tax benefits for the Left Bank of the Dniester.
In Moldova, the import of goods is subject to several types of taxes: customs duties, VAT and excise taxes (for excisable goods). Transnistrian entrepreneurs did not pay these taxes to the Moldovan treasury. In 2024, the Moldovan authorities amended the Customs Code, obliging Transnistria to pay customs duties to the Moldovan budget. According to the current bill of the ruling PAS party, Chisinau abolishes the remaining benefits and obliges Transnistrian businesses to also pay VAT and excise taxes on the import of goods. This money will go to the Convergence Fund created by the authorities, which will also be replenished from the Moldovan treasury and donations from external partners. From this fund, as planned by the authorities, projects in Transnistria and projects aimed at bringing the two banks of the Dniester closer together will be financed.
Several amendments were made to the bill before the final reading vote. Thus, the original version of the document assumed that from June 1, an 8% VAT on gas would be introduced for the region, as on the Right Bank of the Dniester. As a result, they decided to introduce VAT in January 2027, and the government will set the percentage. In addition to gas, a similar approach is proposed to be applied to the supply of balancing electricity. For other categories of goods, VAT and excise taxes will be introduced gradually. This year they may be introduced for alcohol and tobacco products.
The author of the amendment and the responsible author of the entire bill, PAS deputy Radu Marian, explained to NM the need for the amendment to provide “greater flexibility” for Chisinau in relation to the Transnistrian region. In addition, on May 5, a meeting of the working groups of Chisinau and Tiraspol on economics was held in Chisinau. The head of the Ministry of Economic Development of the Transnistrian region, Sergei Obolonik, also arrived in the capital. The main topic of the meeting was the abolition of tax benefits for Transnistria.
In Tiraspol, this initiative of Chisinau was criticized, noting that it was not discussed with Pridnestrovie, and its main goal was “extortions from the Pridnestrovian people.”
“Extortions” of Chisinau
Chisinau’s intention to cancel tax breaks for Transnistria and create a Convergence Fund became known two months ago. Tiraspol did not comment on this initiative at the time, and later the Transnistrian authorities called the abolition of tax benefits “extortions.” This term is used by representatives of Tiraspol in negotiations and by the Transnistrian media. In Transnistria they claim that “the introduction of excise taxes and VAT will lead to the collapse of the Transnistrian economy and a humanitarian crisis.” Deputies of the Supreme Council (SC) of Transnistria (the local parliament) and Rybnitsa trade unions addressed Chisinau with a request not to cancel the benefits.
Meanwhile, former Supreme Council deputy and political expert Anatoly Dirun believes that “there will be no catastrophe,” but the negative consequences should not be denied. “Transnistria will survive. And the possible consequences need to be demonstrated based on numbers. But for some reason we don’t see this,” the expert noted.
According to him, Tiraspol has something to respond to Chisinau and the authorities of the Left Bank still have leverage: “Which ones, I can’t say right now. But pain points (in relations between Chisinau and Tiraspol) remain, and Tiraspol will be able to put pressure on them. This is a game at a card table, where everyone looks at what they have in their hands,” the expert explained
The main risk is double taxation?
On the Left Bank they are talking about the collapse of the economy, as Transnistrian enterprises will face double taxation. They will have to pay taxes both in Tiraspol and Chisinau. Economic expert Veaceslav Ionita considers this argument groundless, since the tax burden on the Left Bank is lower. “If in the Republic of Moldova budget revenues account for about 35% of GDP, then on the Left Bank it is about 20%. In addition, there is no VAT in the region – the main source of income for the budget of Moldova, which allows the population and business to pay less taxes,” the expert noted in one of his studies. In a conversation with NM, he emphasized that the budget deficit of the unrecognized republic is huge, and the sources of covering it are classified.
The introduction of VAT can correct the situation with the budget deficit, but Tiraspol cannot do this for political reasons. Now, after Chisinau decided to introduce VAT, the authorities on the Left Bank want to gain control over the funds collected. The leader of Transnistria, Vadim Krasnoselsky, stated this on May 5 in an interview with Pridnestrovian television channels. “We do not give up the idea of financing projects in Transnistria from the Convergence Fund. I even suggested where this money could be directed. But there must be control over money, and to a greater extent ours, because it is our money. Otherwise, it turns out to be some kind of “common fund,” Krasnoselsky said.
And Veaceslav Ionita, summing up, noted that Pridnestrovian business will suffer less from the introduction of taxes than residents of the region, since prices will rise: “In any case, we are talking about the gradual introduction of taxes. And now we are talking about rising prices for alcohol and tobacco products.”
Will Transnistria stop dumping?
Economist and political commentator Victor Ciobanu also spoke about rising prices in the Transnistrian region. According to him, this will be a short-term effect from the introduction of taxes: “In this logic, Tiraspol’s opposition is understandable. They need to somehow explain this rise in prices.” But in the long term, he added, this money will go to all sorts of projects: “Chisinau is not taking this money. They will go to Transnistria. But this is a delayed effect, that is, “we will collect this money and then do something.”
Ciobanu also drew attention to the fact that the introduction of taxes would level the playing field for enterprises from the Right and Left Banks. “Transnistrian enterprises dumped on the market. For example, the products of BPM, which deals with cement and metal, were cheaper, but now they will be in a competitive environment. I would not say that Transnistrian enterprises will completely disappear due to the introduction of these taxes. But conditions will now become equal for both banks,” the expert believes.
Is everything bad enough in Transnistria?
Although experts agree that the introduction of taxes will not lead to a disaster on the Left Bank, it should be noted that the economic situation in Transnistria, after a series of energy crises and gas problems, remains difficult. Thus, economic expert Veaceslav Ionita noted in his study that on the Right Bank, GDP in 2025 grew by 2.7%, while on the Left Bank a decline of at least 18% was recorded – the largest in the last 25 years. “Compared to 2010, the GDP of the Left Bank today is 13% lower, and the economic situation is worse than 15 years ago,” the expert said.
The differences between the two banks of the Dniester are also noticeable in the incomes of the population. “In 2025, the average salary on the Right Bank was 15,700 lei, and on the Left Bank – 7,800 lei, that is, half as much. If ten years ago salaries on the Left Bank were comparable or even higher than on the Right Bank, now the gap has increased significantly: the increase on the Right Bank was more than 10 thousand lei versus 1,300 lei on the Left Bank,” the study says. Inflation is also higher on the Left Bank. And the introduction of taxes will obviously only increase inflationary pressure.
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