According to the figures from the State Tax Service of the Republic of Moldova, in 2021 the total income of CSOs from the 2% designation mechanism amounted to over 440K Euros. Compared to the previous year, the allocated amount has increased by 48.35%. This represents the highest annual value since the mechanism was introduced in 2017, along with a record number of contributors: 36.6K.
The 36.6K persons who used the mechanism represent 3.1% of the total number of taxpayers (natural persons) in the Republic of Moldova. This rate has increased by almost 2 percentage points, from 1.3% over a five-year period. This means the number of taxpayers using the mechanism more than doubled since 2017.
It is noteworthy that this year’s increase follows last year’s drop, when the income of CSOs from the mechanism decreased by 17%. The cause for the decrease in 2020 was probably the COVID-19 pandemic, which deterred taxpayers to avoid unnecessary visits to the Tax office, thus failing to submit the percentage designation form.
The increase in 2021 is essentially a return to the positive dynamic recorded in the annual amounts designated between 2017 and 2019. Although compared to the pre-pandemic figures (2017-2019), the pace in 2021 is significantly lower, it is interesting to note about the current positive evolution that the relative increase in income (+48%) is higher that the relative increase of the total number of contributors (+28%). This indicates that taxpayers who have made percentage designations this year have incomes above the average of previous years.
Overall, this year’s records are good news for CSOs and represent an important recovery after the first pandemic year. This gives hope that the mechanism will continue to expand in line with previous positive trends and produce increasing value for CSOs in the coming years.