New Year, new price hikes

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2013 started with price hikes for energy and gas and will bring, later this year, other modifications of excise duties for diesel fuel and tobacco. The VAT payment on the cashing of invoices also came into effect on January 1.

The beginning of 2013 made no exception to the rules of last years and came with price hikes for utilities, taxes and excise duties, while other increases will be operated later this year. Starting January 1, 2013, electricity price increased by 10 pc, which include the acknowledgment of higher production costs by the Energy Regulatory Authority (ANRE) and the higher state aid granted to producers of renewable energy.

According to ANRE officials, for an average monthly invoice of RON 40 corresponding to a consumption of 100 KWh, the increase operated starting January 1 is RON 4.The devaluation of the RON against the EUR will have an additional influence on the price increases for products subject to excise duties. Excise duties are special consumption taxes paid to the state budget for domestic or imported products. The excise duties paid for alcohol and liquors, processed tobacco, energy products and coffee increase this year mainly because of the higher exchange rate used in calculating them. The exchange rate for calculating excise duties in 2013, announced on October 1 by the European Central Bank (ECB) is 4.5223 RON/EUR, 5.2 pc higher than in 2012, when it stood at 4.3001 RON/EUR. Last year, the government also decided to hike excise duties as of January 1, 2013, from 374 to 391 EUR/tonne. Starting with July 2013, we might also witness an increase of excise duties for cigarettes, from 79.19 to 81.78 EUR/1,000 cigarettes, in line with the calendar ruled by the government, which will result in another price increase.Another price that will go up this year is that of gas for population, which is scheduled to increase by 10 pc, i.e. by 8 pc starting July 1 and 2 pc from October, according to the calendar for eliminating regulated prices, announced by ANRE.Another measure that came into effect on January 1st is the payment of the VAT upon cashing the invoice, which is about collecting the tax the moment when the provider of a product or service receives the payment for the respective merchandise, but no later than 90 days since the moment when the invoice is issued. The measure is mandatory for the taxpayers that have an annual turnover under RON 2.25 M.

The first car registration tax remains in effect

The tax on the first sale of an automobile, suspended by the previous government until the beginning of this year, returned into force as of January 1st, as it was not replaced by the green stamp, as it had been expected. Last week, a briefing on this theme was discussed during the cabinet meeting, but nothing was decided. Premier Victor Ponta had previously announced that the first car registration tax will be replaced with a “green stamp” that will be more expensive for old and polluting vehicles, while the owners of new cars will pay less, even nothing at all in the case of hybrid electric vehicles. He added that the value of the green stamp will be calculated depending on polluting emissions and the engine capacity of each vehicle. The first car sale tax, enforced by the Boc cabinet at the end of 2011 should have been paid when the vehicle was sold by its first owner, if no green tax was paid for the respective vehicle.As for local taxes and dues, they have been already increased in certain counties with the cumulated inflation for 2010-2012. For example, taxes and dues went up 16 pc at Ploiesti and Suceava, the first day of the year when the Finance Department of the respective towns were open to the public. Hundreds of inhabitants crowded at their desks, to benefit from the 10 pc discount granted to early payers. On the other hand, the Municipality of Iasi announced that local taxes and dues in 2013 will be kept at the same level as last year, municipality spokesman Sebastian Buraga announced.Crossing taxes for the Giurgeni – Vadul Oii and Fetesti – Cernavoda bridges on the Danube will go up by more than 10 pc, but discounts will be granted for multiple and prepaid crossings. The new levies were enforced by an order of the minister of Transport and Infrastructure that modifies the provisions of a similar act dating from 2010. Starting April 1, 2013 levies will increase to the maximum indexed level. The value of the taxes includes the VAT. In the case of the Giurgeni – Vadul Oii bridge, the tax for one crossing of an automobile or vehicle with a total maximum authorised mass less or equal to 3.5 tonnes will increase from RON 9 to RON 10 in a first phase, then to RON 11 later. The tax for vehicles with at least four axles and a total maximum authorised max of minimum 12 tonnes will increase to RON 55 and, respectively, RON 64.In the case of the Fetesti – Cernavoda bridge, the tax for one crossing of an automobile or vehicle with a total maximum authorised mass less or equal to 3.5 tonnes will increase from RON 11 to RON 12 in a first phase, then to RON 13 later. The tax for vehicles with at least four axles and a total maximum authorised max of minimum 12 tonnes will increase to RON 80 and, respectively, RON 91.Premier Victor Ponta also announced on Antena 3 that he discussed with the delegate minister for Small and Medium-Sized Enterprises, Business Environment and Tourism, Maria Grapini about the idea of enforcing a flat tax in the sector of services.