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January 26, 2022

Additional taxes, bad signal for the market, companies’ reps warn

The Government will overtax by 60 per cent companies conducting natural gas extraction and sale operations in Romania, including from Black Sea fields, the tax being applied on the extra earnings obtained from the deregulation of sector prices. The tax will enter into force on February 1 and will be applied until the end of 2014, Mediafax notes. There will also be a tax on ‘natural monopoly’ in the sector of electricity and methane gas, billed to power transmission and distribution operators as of February 2013, valid until the end of 2014. Electricity and gas distribution operators say the introduction of such extra-taxes will have a negative impact on the energy sector:  ‘We express our surprise that the market operators have not been consulted upon such an intention. This will lead to the reduction of investments in the distribution grid and will endanger future privatisation plans, especially for the outstanding privatisations of the electricity distribution companies’, member companies of the Employers’ Federation of Associations of Energy Utility Companies (ACUE) mention in a press release. Reactions are also coming from GDF Suez Energy Romania, who notes that the windfall tax in the electricity and gas distribution sector following the deregulation of the market will bear notable influence on operators’ financing capacity, warning that additional costs would have to be transferred to consumers. GDF Suez Energy Romania also says the National Energy Regulatory Authority froze distribution tariffs in 2009 and never raised them in keeping with the inflation rate. On a distinct note, municipalities choosing to keep local council taxes at 2012 levels will only be able to do so if they have no outstanding debt and if they are able to prove that the measure will not hurt their own revenue. In any other situation, the Government will force them to raise taxes and charged by new decisions. Local authorities will be allowed by the Government to rent or use vehicles under operational leasing agreements this year by exception to the interdiction valid since 2009 for all public institutions, the argument being that the absence of vehicles generates activity deadlocks. On the other hand, the state wants to change the taxation regime for individual farmers from a tax applied to the declared income to a tax calculated per area or per number of animals and tax over 600,000 farmers who receive the annual subsidy but do not declare profit or pay any taxes.

10 pc rise of lager excise duty will not have any effect

The increase of the beer excise duty by 10 per cent – a fiscal measure announced by the Ministry of Public Finance (MFP) is not going to have the effect wanted by the cabinet and its impact will be a negative one on the revenue collected for the sate budget, warn the representatives of the Romania’s Brewers’ Association (ABR) in a release. ‘

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