Project Summary:

The project will have high complementarity with other interventions aiming at strengthening the public finance management systems and processes in the country, will build on the foundation of the results achieved by the previous initiatives supported by UNDP-Slovak Trust Fund, and will be focused on two areas: (1) Alignment of public financial flows to finance SDGs and (2) Alignment of tax and fiscal policies with the SDGs

Objectives:

• Support the Government to carry out public spending reviews in two identified sectors with the purpose of its use for preparing the public budgets; 
• Analyze the public spending reviews implemented in Moldova and adjust the Spending Review methodology, taking into consideration the SDG Finance approach and impact measurement with the scope of its institutionalization;
• Support research and capacity development in Moldova to develop tax/fiscal policies to achieve specific SDGs:
  (i)    Assess the feasibility and resource implications of implementing a higher tax on tobacco;
  (ii)    Assess the feasibility and resource implications of implementing a higher tax on petroleum products;
  (iii)    Assess the implications of adjusting fiscal policies to address alcoholism, differential application of excise duty for small-scale alcohol production, and reducing excise tax evasion;
• Support the Ministry of Finance and other relevant authorities in aligning tax expenditures with the SDGs and assessing the impact and effectiveness of tax expenditures in achieving development goals;
• Develop policy proposals to adjust the local public finance system alignment with Public Administration Reform and Public Finance Management Strategy, ensuring these adjustments support SDG financing objectives.

Expected results:

• Public Spending Reviews exercises are implemented in two sectors and the reports are developed;
• Spending Review Methodology is revised, and SDG impact, including Gender Equality approach, is incorporated into the spending review methodology;
• The feasibilities and resource implications of implementing a higher tax on tobacco and a higher tax on petroleum products are assessed;
• The implications of adjusting fiscal policies to address alcoholism, including a track and trace system, differential application of excise duty for small-scale alcohol production, and reducing excise tax evasion, are assessed;
• Tax expenditures against the SDGs are mapped, and assessment of the effectiveness of selected tax expenditures in accordance with the UNDP Tax Expenditures Toolkit is conducted;
• Policy proposals to adjust the local public finance framework alignment with Public Administration Reform and Public Finance Management Strategy, ensuring these adjustments support SDG financing objectives are developed.