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June 21, 2021

Taxes to grow by 16 pc in Bucharest

The Bucharest General Council (CGMB) approved yesterday the hiking of taxes on property, plots of land and cars by 16 per cent, according to a draft decision to set them in line with government ordinance 1/2013. Bucharest Mayor Sorin Oprescu explained that the hiking of taxes in Bucharest is mandatory, considering that the government ordinance forces him to hike taxes and does not give him the possibility to decide. “Oprescu did not change his mind. I oppose this measure which leads to a tax hike but the government ordinance does not allow us to decide whether we want the tax hike, it forces all mayoralties that have arrears to hike taxes,” Bucharest Mayor Sorin Oprescu stated. The draft was adopted with 30 votes in favour, 11 against and four abstentions. PDL and PPDD Bucharest General Council members were the ones that voted against and abstained. The Mayor explained that although three of Bucharest’s six districts have no debts and basically do not fall under the provisions of the ordinance that stipulates the hiking of taxes by 16 per cent, the Finance Ministry “treats Bucharest as a whole.”Districts 2, 4 and 5 register debts, while districts 1, 3 and 6 are debt-free. Of the taxes that are strictly the City Hall’s prerogative, the only ones growing are the tax on the release of the certificate of urbanism for plots of land ranging from 151 to 200 square meters (a hike of RON 1) and the tax on the release of the certificate of urbanism for plots of land larger than 1,000 square meters (a hike of RON 2). On the other hand, the government had already promised to the International Monetary Fund that it will make sure all indebted mayoralties will hike local taxes in relation to the inflation rate registered in the last three years (16 per cent), the commitment being included in the letter of intent agreed with the Fund as a measure meant to avoid the accumulation of new arrears. The commitment was taken in the context in which the government has already issued an ordinance in this sense, but also after government authorities explained on several occasions that the government is not the one that imposes the hike of local taxes, the decision being left to the mayoralties. At the same time, according to a draft emergency ordinance, local authorities will be forced to lower the arrears by at least 85 per cent in two months’ time. Thus, local authorities that register arrears on January 31 will be forced to lower the volume of debt by at least 85 per cent in two months’ time, by March 31. Otherwise the Treasury will limit the payments that can be done from their accounts.

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