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Romanian Economy Minister on EC hold

Joi, 21 iunie 2007, 0:00

Romanian Economy Minister Varujan Vosganian said on Thursday that until now the European Commission did not provide an answer regarding Romania's proposals on changes to a first registration car tax introduced in the country early this year, which sparked intense criticism in Brussels.

Vosganian said in a press conference that he was optimistic that the issue regarding the first registration car tax would be solved and that the European authorities sent recommendations, which refer to terminology clarifications

His declarations were stirred up by governmental sources which a couple a days before announced that the EC formulated and transmitted an official position regarding the way the Ministry chose to calculate the car tax.

Vosganian explained that the EC position was not an attitude, as interpreted, but a call for information from the Direction of Income and Customs taxes and also included suggestions to deal with the issue. The Minister added that, for example, second hand cars from the EU perspective are those older than one month as compared to three months, the Romanian view.

Romanian authorities presented, last month, to the European Commission officials the proposals regarding the first registration car tax affecting imported cars.

The new calculus formula is based on the principle that the tax quantum decreases as the age of the car increases.

For example, the value of the tax decreases to almost half, as compared to the actual tax for the Euro 4 cars not older than 1-2 years. Higher taxes will be a characteristic of non-Euro cars, and for Euro 5 cars, there is no first registration car tax.

The EC solicited the modification of the car taxing system of Romania, considering that the actual regulations are discriminatory for second hand cars, imported from other EU countries.

The first registration car tax was introduced this year, sparking complaints from the European Commission as it was seen as a means to prevent free competition on old and new car sales. A reviewed calculus for Romania’s controversial first registration car tax will be included in the fiscal code on January 1st, 2008.

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