Gov't to alter vehicle first registration tax to meet EC's requirements

PM Tariceanu stated that the controversial tax could suffer technical amendments at most. While in Brussels yesterday, the Minister of Economy and Finances, Varujan Vosganian said that cabinet will issue, in the next two months, an emergency ordinance which will keep first registration with the requirements of the EC, the level of the fee remaining to be ‘substantially reduced”.

Despite the warnings sent by the European Commission (EC) a week before in connection with the vehicle first registration tax, Prime-Minister Calin Popescu-Tariceanu seems unmoved and continues to state that it will only be changed if technical inconsistencies are identified, but that in no way shall it be reduced or abrogated. Attending the Aspen Romania Institute meeting.

Romania’s executive will issue, in the next two months, an emergency ordinance by which terms addressing first registration will be set, in keeping with the requirements of the European Commission, the level of the fee remaining to be ‘substantially reduced”, as declared yesterday, in Brussels, by the Romanian Minister of Economy and Finances, Varujan Vosganian, following a meeting with the commissioner responsible for taxation and customs union, Laszlo Kovacs.

“The issue of money refunding cannot be clearly addressed unless the procedure completes and Commission notifies the final decision”, Vosganian affirmed.

‘We are going to make suggestions to solve the so-called inconsistencies. (…) Certain technical aspects will probably be changed, such as the custom value of vehicles that cannot be subject to a charge higher than the item’s residual value’ explained Tariceanu. He reminded that the vehicle first registration tax in Romania was not a fiscal tax, but a measure designed to protect the environment and stop used car imports. ‘I see no reason why Romania would now open its gates and let in polluting vehicles said the PM. Moreover, he stressed out that our country was not going to ‘accommodate’ the wishes of the Western industry ‘very eager to discard the scrap stuff’ and that it would be anyway a non-sense to let used cars in having terminated older Romanian cars within the scraping premium programme.

During the same event, Tariceanu was asked to name the macro-economic indicator that was of his highest concern, and the answer came that he could not pin-point such an indicator but admitted to having been worried by inflation rate trends this autumn. But he added that conditions were met for inflation to go back to normal and actually meet the Central Bank target set for 2009.

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