Tiraspol, 22 August. /Novosti Pridnestrovya/. The government has presented a draft law on investment activity in the PMR. According to the prime minister, Alexander Martynov, this document is one of the most important items on the governmental agenda.
Modern and, most importantly, efficient investment legislation will help to attract foreign capital to the country. It should minimise the risks for the investor, bearing in mind the country's non-recognised status, the government's press service reports.
«Iа we take as a basis the experienc of other countries, we must answer the question: why would investors come to Pridnestrovie rather than Kazakhstan and Russia if the conditions are similar, and those countries are recognised? Therefore, we need to offer unprecedented guarantees for investors, to minimise these risks and get chances for investment," underscored Martynov.
The government believes it is important not only to protect investors but grant them certain benefits and preferences that will cover the high risks.
«We all understand that the level of investment risks is high, and so are the needs of investors in terms of capital profitability and investment. In other words, the more you risk, the greater the return. These are the rules of the economy. And it is precisely through the manoeuvring of tax rates and tariffs that we can increase the profitability of capital," said Martynov.
According to the Ministry of Econmic Development, the volume of investment has declined over previous years. This figure has fallen by 31% campared to 2014. The share of investment in GDP was 9.5%, though this rate was 14% in 2015. Several factors influenced the deterioration: foreign-policy processes, devaluation in the CIS countries, decline in business activity due to unstable conditions.
«Lack of access to external financing, limited domestic credit resources, substantial tax burden on a number of sectors of the economy. This factor has been actually taken into consideration and reflected in the Fiscal and Tax Policy Concept in terms of reducing the tax burden," said the minister of economic devlopment, Sergey Obolonik.
Therefore, in order to create favourable investment conditions in Pridnestrovie, the ministry has embarked on a reform of this part of legislation. Experts have studied the experience of European countries, as well as Russia, Kazakhstan and Kirgizia, compiled it into a single document and added a regional component.
It is proposed to legislate a contract between the state and the investor, under which additional incentive measures may be provided to the investor. And in some cases, individual guarantees and preferences.
«Within the established order, the investor will be granted state guarantees and investment preferences — tax preferences for the reduction of the taxable base, lower tax rates, tax exemptions, exemption from customs duties. Additional incentives are offered for the establishment of concessional rates for a single social tax, land use benefits and the provision of state grants. The maximum amount of government support is no more than 30%," said Obolonik.
The contract will be concluded between the investor and the government and will provide for the obligations of the parties in joint investment activities. According to the minister, it is important that the draft law should lead to a change in GDP or to an increase in job opportunities.
A number of amendments to the draft law were proposed during the discussion. In particular, the prime minister ordered that all possible options for the enforcement of other countries' court decisions to protect the rights of investors in Pridnestrovie. In the shortest possible time the document will be edited and presented at the next government meeting.
