Digital Moldova’s 2020 Strategy sets out four main goals for the country’s ICT sector: to continue the development of the country’s ICT infrastructure; to create local digital content; to educate and train the Moldovan population to make the best use of ICT services; and to ensure cyber security. Pavel Filip, Minister of Information Technology and Communications, discusses his country’s ICT development strategies. The minister recently received the Medal of International Communications from the UN for his efforts to develop Moldova’s ICT sector.
European Times: What are some of your recent ICT projects?
Pavel Filip: Moldova now has a fibre-optic network which covers most of the country (about 85% of the communities) and will cover the entire country by 2020. According to a new law on shared use of electronic communications infrastructure which will be adopted soon, all new bridges, roads and buildings must be provided and fitted with special places for Internet cables. We consider that electronic communications infrastructure is not used at its full potential and special measures are imposed in order to raise the efficiency of its use as well as to guarantee the right of access and use of national backbone networks by local providers of electronic communications services. In addition, all mobile operators will be required to provide access to their towers by other operators in order to avoid duplications of investments. Also, incumbent operator Modtelecom will be obliged to offer access in special conditions to ducts networks to other operators for development of its own networks. We are also implementing a national program for efficient use of radio frequency spectrum which will create new conditions for operators to develop mobile services based on principles of neutrality of technologies. Thanks to a range of measures oriented to stimulate competition and investment, Moldova already enjoys very fast Internet connection speeds being listed in the first 20 countries at a global level.
We are also developing a series of actions in order to stimulate the implementation of the electronic public services being one of the first countries participating in the World Bank’s e-Government transformation initiative. In this regard we adopted a new law on electronic signature and electronic documents. We launched the issuance of electronic ID cards for our citizens and the government is implementing an Electronic Transformation Action Plan with the goal to raise efficiency, transparency and implementation of ICT in a governmental processes.
European Times: Can you highlight opportunities for investors in Moldova’s ICT sector?
Pavel Filip: Currently, a series of dynamic IT companies with an impressive turnover, which are focused on providing IT outsourcing services to foreign companies, are operating in the Republic of Moldova. Currently, employees of IT companies (developers) have special tax incentives in the form of exemption from the payment of the mandatory state social insurance and income tax until 2016, inclusively.
However, MITC has developed a package of initiatives to increase the competitiveness of the IT industry: the draft Strategy for the years 2014-2020, and the draft Law on information technology industry parks, aimed at creating the necessary prerequisites for boosting development of the information technology industry oriented to export.
We are creating new incentives for IT investment. Through the facilities and tax facilities proposed to be granted to IT park residents, we can mention the flat tax in the amount of 12% of the sales revenue – however, this may be reduced in time to 9%, incorporates the following taxes: income tax from business activity, income tax from salary, social insurance contributions due by employees and employers, the first compulsory health insurance due to employees and employers, local taxes, real estate taxes and road tolls. It is also a proposed exemption from customs duties and VAT on imports of IT equipment necessary for the development of IT park residents’ activities.
In this regard, we intend to create the most competitive business environment in the region for the IT industry. We have also strengthened our regulatory environment to provide additional protection for investors. In a partnership with USAID, Ministry of Education and Technical University of Moldova with participation from a variety of national and multinational IT companies like Microsoft, IBM and others, we are preparing to open a Centre of ICT excellence training and education to provide skilled human resources for ICT industry.
European Times: How important is the ICT sector to Moldova’s economy?
Pavel Filip: I believe that Moldova’s economic development will be driven by the ICT industry. Moldova is a small country whose wealth is its people, with their knowledge, their intelligence and their capabilities. This is why we are focusing on building a knowledge-based economy in Moldova; a knowledge-based economy is driven by ICT. With the association agreement being signed with the European Union, Moldova will now be even more attractive to foreign investment, not only from Europe, but the world. And I am confident to say, investors can count on strong growth for their ICT projects here.
