Romania Waits EC’s Go Ahead For A 30% Cut In Car Tax - Sources

“The proposition aims to replace the current tax value, which is triple compared to the one set in the summer of 2008, with a tax that will be double against last year’s tax. Computation stays the same, only the coefficients change. In addition, different coefficients would lead to increase payments for non-Euro or Euro1 pollution standard cars, so the tax will hike for these categories, although not significantly,” the mentioned sources said.

 

They said owners of new cars with Euro 4 engines up to 2,000 cubic centimeters will still be exempted from paying the tax, in a move to support the country’s ailing auto industry.

 

Romania sent a draft act including these amendments to the authorities in Brussels at the end of last week.

 

If accepted by the EC, the new car tax will be enacted by a government emergency Ordinance.

 

Last Wednesday, Environment Minister Nicolae Nemirschi said Romania’s pollution tax on cars will be reduced and that car owners who paid the triple tax might get refunds.

 

The European Commission recently informed the Romanian government that the decree tripling the car tax, passed by the former government, breaches EU laws.

 

Romania’s former liberal government decided in April to introduce the pollution tax for cars, calculated depending on the technical data of each car, based on carbon dioxide emissions, which replaced as of July 1, 2008, the tax for the first registration of cars which was then effective.

 

Amendments to the car tax brought a fall in the number of new cars, and boosted used car imports.

 

On the backdrop of the increase in the number of imported second-hand cars, the government decided via an emergency decree in December to triple the car tax for used cars, and to suspend it for new cars with Euro4 engines of up to 2,000 cubic centimeters, registered or the first time in Romania and the European Union.

 

In January 2009, total car registrations in Romania, including new and used cars, were down 52.8% compared to January 2008, an indication that the new car market continues its abrupt decline, while registrations of imported used cars took a nosedive in January following a sharp increase of nearly six times in December 2008.