Romanian Pollution Tax For Cars Could Use Exponential Growth Format

The increase of the pollution tax for used cars will be possible through the change of the current calculation format, Government sources told MEDIAFAX Wednesday.

"The main variant analyzed is for the tax to grow exponentially for all used cars imported and that lack Euro 4 type minimum firings, to a level differentiated by age. This will bring about a situation in which for cars older than eight years and with a selling price of some EUR1,000, the tax will be higher than the purchase price," the sources said.

The car tax was amended on July 1, 2008, with the new format involving a higher sum for new cars, but a value significantly lower for used cars. After the change of the car tax, new car sales began to drop while second hand car sales soared.

The number of imported used car registrations doubled in the first ten months, compared to the same period of the previous year, to 205,086 units, while new car registrations dropped by 2.4%, for the same interval, to 252,935 cars.

Romanian Prime Minister Calin Tariceanu announced Wednesday that the pollution tax for used cars, as well as the bonus granted to people who scrap their old cars, could be increased in the Government meeting held Thursday.

According to government sources, the bonus could grow from 3,000 lei (EUR1 = RON3.8379) to RON4,000.

Approximately three weeks ago, the Government decided to issue an emergency ordinance suspending the collection of the pollution tax for cars starting with December 1, 2008 until the end of December 2009, for Euro 4 cars with engines of up to 2,000 cubic centimeters registered for the first time in Romania and in the European Union.

Lacking a reply from the European Commission, the coming into force of the suspension will be postponed until December 15 or until the ordinance is published in the Official Gazette.