The eventuality of the rise in VAT on sugar from 8% to 20%, stipulated in the draft Fiscal Policy Objectives for medium term (2012 -2014), has aroused concerns among the manufacturers in the field. At a meeting with PM Vlad Filat on Friday, they complained that such a measure would hinder the development of the industry, Info-Prim Neo reports. Alexandru Slusari, the president of the farmers' association Uniagroprotect, said that instead of bringing an estimated surplus of 160 million lei to the national budget, the measure could eliminate all the sugar manufacturers in Moldova until only one is left. Jobs will be lost and sugar beet producing households will be deprived of income. Raisa Bejan from the Sugar Manufacturers Association thinks that if VAT is raised, the Moldovan sugar will have to face competition from imports from Kazakhstan or the Baltic countries, for example. Agriculture Minister Vasile Bumacov noted that, while areas planted with sugar beet have shrunk three times since 1996, investments in equipment and technology resulted in higher rates of production, from 20 to 38 tonnes per hectare. Annually, Moldova produces 100,000 tonnes of sugar, which satisfies the domestic demand and is also enough to export to the EU and CIS markets. “This is a profitable industry. And this is due to the numerous facilitations that manufacturers have enjoyed for quite a long period of time”. Bumacov added that the sugar industry was one of the most protected business in Moldova, benefiting from a safeguard tax and lower customs duties. PM Vlad Filat has remarked that Moldova is seeing fair economic growth, however, this does not lead to higher budget revenues. And this, according to the premier, is due to not only fiscal management deficiencies, but also due to the attitude of certain companies which, on one hand, seek market liberalization and, on the other, seek facilitations and privileges, to the detriment of the manufacturers from other industries. Vlad Filat gave instructions to create a task-force consisting of members from the Ministry of Agriculture and the Ministry of Finance, as well as from the sugar industry, to assess the impact of an increased VAT on the sector. “We should bear in mind that the principle of solidarity is crucial in a market economy. The national budget has obligations to care for certain groups of population and they must be fulfilled. So we hope we can reach a reasonable consensus with the sugar producers”, said Vlad Filat. Before being submitted to the Cabinet for consideration, the 2012 -2014 Fiscal Policy Objectives will be discussed separately with each industry of the national economy.