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Bucharest
December 1, 2021
BUSINESS

Price hikes and significant changes as of September 1

The autumn has come with increases at train tickets, higher excise on alcohol and on other luxury goods and massive layoffs in state companies. The only good news coming out is from the bakery industry.
Thus, to the bread and bakery products with no filling is applied 9 percent value-added tax (VAT) starting September 1, according to a common Order of the agriculture and rural development ministry and the public finances ministry published in the Official Journal on August 28. In this regard, the Government is counting on a reduction of tax evasion in the bakery industry. The Fair Competition Council chairman Bogdan Chiritoiu underscored during a news conference that each retailer has the freedom to set ‘the prices they want for bread’, with the Council not being able to step in this matter.
The Ministry of Public Finance (MFP) introduced starting yesterday excise duties on gold and platinum jewellery – wedding bands excepted – of EUR 1 per gram for less than 14K gold, and EUR 2 per gram for gold over 14K, provides a Government Urgency Ordinance adopted at the end of July.
Other luxuries too are subject to excise duties as of September 1. Natural fur garments with a cost below EUR 1,500 will be subjected to an excise duty of EUR 50, with the tax increasing gradually to EUR 1,200 for furs priced over EUR 6,000. New and used (imported) cars with engines of more than 3,000 cc will be charged an excise duty of 1 euro per cc for the engine capacity exceeding the aforementioned limit.
A gradual excise tax will be applied on firearms: EUR 50 for a price below EUR 500, with the tax going as high EUR 1,500 for weapons as pricey as EUR 6,000; cartridges will also be charged an excise tax of EUR 0.1 – 0.4 a piece, depending on the price category. Sailing vessels longer than 8 metres will be charged an excise duty of EUR 500 per meter of length, while the excise for motor yachts will be EUR 10 per hp if the engine is over 100 horsepower.
Excise duties on alcohol will increase from EUR 750 per hectolitre to EUR 1,000 per hectolitre.
The rise in excise duties on certain luxury goods and the introduction of new excise duties for other goods is intended to offset the possible impact on budget revenues of the cutback from 24 percent to 9 percent of the VAT on bread. Additional revenues from excise duties are estimated at RON 300 million by the end of 2013.
With the coming of autumn, tax returns for all drivers crossing the bridge at Fetesti. It will pay RON 11 for any vehicle with total weight exceeding 3.5 tonnes, RON 37 for minibuses and RON 49 coaches.
Rail fares by up to 10 pc higher
Rail fares will undergo a rise by up to 10 percent, differentiated by the travel mileage, as of September 1, according to the Order approving the general service fees in the public passenger rail transport published in the Official Journal. Thus, the prices of train tickets will increase by percentages ranging from 0.9 percent to 10 percent. According to the Order, a 2nd class ticket for a Regio train on a distance of 51 – 60 km could increase from RON 7.30 to RON 7.50, while the ticket for an InterRegio train on the same route could cost RON 14.50 instead of RON 14.10 as by now.
For travel distances between 301 – 350 km, the price of a 2nd class train ticket will rise from RON 34.70 to RON 42, while the fare for an InterRegio train on the same route will increase from RON 67.30 to RON 71.50.
This measure was justified by CFR heads taking into account the inflation evolution in the past two years and the increasing of some company’s costs of  fuels, energy or components. The last increase of rates was made on August 14, 2011, inflation in the August 2011 – June 2013 period being of 8.3 percent.
Lay-offs at Posta Romana and thermal power plants
Starting this month, Romania’s debt-mired national postal company Posta Romana, will lay off 3,650 employees, from 32.887, following negotiations between management and unions. This number represents around 11.4 percent of the current headcount. The severance payments to be received are to be determined but they could range from 3 to 60 salaries. In the first phase of the restructuring, 2,392 postal employees opted for collective redundancies and the remaining 1,258 will be selected by a professional testing process on the basis of specific posts. Also, the Government gives green light to several dismissal in thermal power plants. Termon Onesti is scheduled to reduce its personnel by 37 employees, CET Bacau – 104 employees, Termica Suceava – 295 employees, CET Braila – 140 employees. A number of some 300-400 employees at the National Agency for Fiscal Administration (ANAF) will be laid off in September, after the completion of the reorganization in operational terms.

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