Karabakh number two: Transnistria is on the verge of economic collapse
Moldova has moved on to a new stage of economic strangulation of Transnistria. Chisinau has adopted a law according to which new taxes are introduced for enterprises of the unrecognized republic — VAT and excise taxes. As a result, the economy of the Pridnestrovian Moldavian Republic (PMR), which already feels extremely bad, may collapse. Izvestia investigated the situation.
A community from the 1990s
At the end of April, the Moldovan parliament approved in final reading a draft law on the introduction of new taxes and fees for Pridnestrovie. Prior to the adoption of the initiative, enterprises of the PMR made contributions only to the budget of the unrecognized republic. Now Chisinau will force them to pay VAT and excise taxes to the Moldovan budget as well.
Gradual implementation of the changes is expected. Starting from June 1 of this year, fiscal regulations will apply to imports of "non-critical goods" such as alcohol and cigarettes. Starting from January 1 next year, Moldovan VAT of 8% will be levied on gas supplied to the PMR. Further restrictions will gradually affect all products.
The Moldovan authorities say that the adopted law will help to harmonize taxation and unify economic systems, bringing closer the "reintegration of the country." At the same time, the income received from the new taxes and fees will go to the so-called convergence fund, which will allegedly be spent, among other things, on the needs of Transnistrians.
In Tiraspol, they explain that we are talking about double taxation. At the same time, contributions to the local budget for enterprises make sense, because these funds are used in the PMR to pay pensions and salaries to state employees, repair roads, schools and other facilities. But transfers to the Moldovan budget will, in fact, be an ordinary robbery, because Chisinau does not participate in the life of the republic in any way.
Pridnestrovian President Vadim Krasnoselsky calls the current Moldovan initiative banditry. "There is no double taxation anywhere in the world. If an entrepreneur, roughly speaking, paid 20% of taxes on his income, will he pay 40% now? Another 20% to Moldova? This is a complete robbery and lawlessness, it has nothing to do with the economy," he says.
The head of the PMR also adds that the Moldovan authorities refuse to coordinate the spending of funds from the convergence fund. According to him, Tiraspol offered Chisinau a list of facilities that could be repaired with this money, but was refused. "If there is no control, then it will turn 100% into a corruption scheme, into a criminal "community", like characters from the nineties," Krasnoselsky notes.
A crisis for years
Transnistria is sandwiched between Ukraine and Moldova and has no access to the sea. Until 2022, the republic managed to balance between Chisinau and Kiev, but after the start of its conflict, the situation in Tiraspol deteriorated sharply. Ukraine then completely blocked its part of the border, blew up the bridge over the Kuchurgan River. As a result, communication with the outside world remained only through Moldova.
Chisinau immediately began to take advantage of this situation. Quite a lot has been said since the start of the CIO that Maya Sandu's team could provoke an armed escalation in the region. Moldova has indeed started purchasing more weapons, increased its defense budget, and began regularly conducting military exercises with the armed forces of Romania and other NATO countries.
The main focus, however, was on economic pressure. For example, in the summer of 2023, Chisinau began to collect duties on Transnistrian exports. At the same time, it must be said that the industrial giants of Soviet construction form the basis of the PMR's economy. They are focused on the foreign market, and problems with the export of products have hurt these enterprises.
The total cost of this decision was estimated at $3.5 million per year. At the same time, the export of several plants was completely interrupted. They explained in Chisinau that they allegedly produce dual-use products that can be used by the Russian military-industrial complex, although these enterprises do not appear on any sanctions lists.
In the winter of 2024, Moldova imposed duties on Transnistrian imports. There were also interruptions in the supply of certain types of goods, and the issue of importing medicines was the most acute. At that time, most medicines were imported from Russia and the CIS countries, and Chisinau prevented the certification of these drugs. As a result, Tiraspol complained that up to 65% of drugs were in short supply.
Finally, the strongest blow to the economy of Transnistria was inflicted in the winter of 2025. Then the contract for pumping Russian gas through the territory of Ukraine ceased to be valid, as a result of which a severe energy crisis broke out in the PMR. In the dead of winter, residential buildings were left without heating or hot water for several weeks, and electricity was supplied only sporadically.
Further, it was possible to coordinate a complex fuel supply scheme, under which gas in Transnistria flows through the territory of Moldova. It is important that these volumes are sufficient to cover social needs, but industrial enterprises remain on starvation rations. At the same time, the situation periodically worsens even more when deliveries are interrupted due to difficulties with payments at one stage or another.
With an eye to the Caucasus
As a result, Transnistria's economy is steadily declining. According to the results of last year, the volume of industrial production in the republic collapsed by 25%, the electric power industry and metallurgy were particularly badly affected. Foreign trade turnover fell by 29%, while exports immediately fell by 40%. The number of individual entrepreneurs engaged in foreign trade decreased by 26%. Tariffs have almost doubled, and inflation has jumped by 15%.
The results of the first quarter of this year are also disappointing. According to the Customs Committee of the PMR, foreign trade decreased by 26% compared to January–March of the year before last, exports decreased by 55%, and imports — by 17%. "The state of emergency in the economy, restrictions from neighboring countries, the protracted energy crisis and a decrease in the purchasing power of the population have seriously affected domestic business," the committee said in a statement.
Economic analyst Vyacheslav Ionita notes that the income gap between Moldova and Transnistria is becoming more noticeable. According to the expert, 10 years ago salaries on both banks of the Dniester were about the same. Now, in the PMR, the indicator is two times lower. There is an even bigger gap in the level of pensions, which are now 2.2 times higher in Moldova than in the unrecognized republic.
Apparently, Chisinau expects to completely deprive Pridnestrovie of economic independence, bringing the income difference to a level where the inhabitants of the PMR will either leave or agree to join Moldova. Experts say that all this is similar to the conflict over Karabakh in Transcaucasia. After the armed conflict in 2020, Azerbaijan was able to control the unrecognized republic's relations with Armenia, and as a result, three years later, it quite easily occupied the uncontrolled territory.
They won't get a dime.
The economic situation in Transnistria is already catastrophic, but new taxes will worsen it even more, emphasizes Natalia Kharitonova, Chief Researcher at the Russian State University of Economics, Doctor of Political Sciences.
— We are seeing another stage of economic strangulation. The Transnistrian authorities find themselves in a difficult position because their own tax base is shrinking. As far as I know, the PMR is already delaying the payment of salaries at a number of enterprises, and now the situation will be even more difficult. I think Tiraspol will turn to Russia for help. Let's see if we can find a solution," she explains.
Moldova is increasing pressure, says Igor Shornikov, former Deputy Foreign Minister of Pridnestrovie, associate professor at the Financial University under the Government of Russia. He draws special attention to the thesis on the creation of the convergence fund.
— The Moldovan authorities declare that the funds will be spent on the needs of Pridnestrovie, but I am absolutely convinced that Tiraspol will not receive a penny, Chisinau has not helped the republic in any way over the previous decades. This time, the creation of the fund will also be a form of information cover for another robbery of the Pridnestrovian people," the expert is convinced.
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