Chisinau, Moldova – Moldova is one of the smallest and poorest countries in Europe – the population is 3.5 million and the average monthly salary is just over 130 pounds.
However, there are hundreds of casinos there, if you trust government data – and even more, if you trust your own eyes.
Some street corners in the capital city Chisinau have four casinos competing for customers with blinking neon lights.
And even in towns that are too small to have their own movie theatre there are often several gambling halls.
But now a new government initiative aims to impose a new tax on the industry that until now enjoyed some tax exemptions.
At the end of November, the acting prime minister of Moldova Gheorghe Brega called for the removal of casinos’ tax exemptions.
He requested the Ministry of Finance, the Ministry of Economics, and the Ministry of Justice to come up with new recommendations on taxing the casino industry, according to a press release on the Moldovan government’s website. Forgive me for being harsh, but there is no explanation for this.” Casinos began opening in Moldova soon after the fall of the Soviet Union, and have been exempt from the Value Added Tax from July of 1998.
Currently Moldovan casinos do not pay the VAT (Value Added Tax), which in Moldova is 20 percent. Casinos, instead, pay annual license fees on their tables and slot machines. In the last ten years, the number of casinos in the country increased approximately five times, some observers here say – and their numbers are still going up.
The acting prime minister’s suggestion follows the comments of the chairman of the government’s Court of Accounts (auditing office), Serafim Urechean, who called the casino industry’s tax exemptions “complete nonsense.” “Just imagine the tax exemptions for casinos in the amount of 80 million lei (2.7 million GBP)! According to government data, there are 56 casino companies in Moldova, and each company operates several branches.
” said Urechean (who also happens to be a former mayor of Chisinau, a former member of the Moldovan parliament, and a former prime minister of Moldova) in November. In 2013, for example, there were 310 casino halls across the country, according to the government.
But representatives from the local casino industry say that imposing a tax on the industry that already pays high licensing fees is unfair.
In normal countries, either you pay for licenses or you pay taxes, but here they want us to do both,” says Alexander Motynga, the general manager of the Eldorado casino company that has 26 locations in Moldova.
“The cost of licenses and authorizations keeps going up.” The annual license fees for a casino table increased from 90,000 lei (3,000 GBP) about eight years ago to 576,000 lei (20,200 GBP) today, while the annual license for one slot machine went up from 3,600 lei (120 GBP) to 23,100 lei (770 GBP) compared with eight years ago, according to Mihail Zabudskii, the general manager of Moldova’s largest casino, Napoleon Palace.
Napoleon Palace has 56 slot machines and 12 casino tables.
“Every year or every other year the price of licenses goes up,” Zabudskii said.