Moldova Takes a Page from Estonia’s Playbook to Overcome Economic Crisis, Says Alaiba

In an interview with Bloomberg, Economy Minister Dumitru Alaiba announced that the Republic of Moldova intends to simplify its tax system in an effort to lift one of Europe’s poorest countries out of the economic crisis triggered by the war in Ukraine, writes Vocea Basarabiei.

According to Alaiba, the changes to the tax system, including a revision of corporate legislation to increase transparency and revenue by eliminating most tax exemptions, will be adopted by July.

A significant part of the authorities’ efforts will focus on bringing the informal economy to light, which, according to Alaiba, represents over two-fifths of the Moldovan economy.

“The war in Ukraine has dampened our economic growth, and we need to recover quickly,” stated Dumitru Alaiba.

Regulating the “gray economy” is a crucial condition because “half of our economy does not respond to any measures we adopt,” added the Economy Minister.


The Republic of Moldova has obtained candidate country status for accession to the European Union and intends to join the bloc by 2030. For the neighboring country’s economy, this means attracting investors with the “simplest tax system,” according to Dumitru Alaiba, as well as overcoming the image problems caused by banking fraud and money laundering scandals.

The Moldovan Minister of Economy further stated that the Government in Chișinău also intends to reduce bureaucracy and follow Estonia’s example by digitizing public services such as tax payments and document issuance.

However, the Republic of Moldova has a long way to go, as its Gross Domestic Product (GDP) dropped by nearly 6% in 2022 to $15 billion, erasing half of the 14% growth achieved in 2021.

Moreover, the inflation rate exceeded 30% last year, significantly reducing purchasing power.

Alaiba estimates that the economy will recover this year, but it will not be a “spectacular” growth due to persistent obstacles. The simplification measures of the tax system aim to trigger double-digit economic growth over the next decade, a necessity for the Republic of Moldova to improve living standards and converge with neighboring Western states, as reported by Bloomberg, cited by

“We cannot afford a 2%-3% growth rate to escape poverty,” added Alaiba.

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