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February 1, 2023

Gov’t engages in self-criticism: Special constructions tax to be dropped in 2016

A new special constructions tax will no longer be introduced in Romania in the next five years after it was noticed that the tax has created big problems in the agricultural sector as well as for certain companies that had to pay for installations that they no longer use, Finance Minister Darius Valcov stated on Thursday at a special conference.

In 2014 the revenues from the special construction tax stood at RON 1.5 bln, and they are estimated to reach RON 1 bln this year, Valcov pointed out.

“RON 1.5 bln were collected last year from the special constructions tax and this year the revenues are estimated to reach RON 1 bln. At first, when the special constructions tax was introduced, we were staking on the possibility of channelling the money collected into the construction of highways, into the development of the health sector. However, we realized that this tax has created big problems particularly in the agricultural sector, namely for farms that are not always very developed. Because of this tax they had to pay RON 3-5,000 only for the fence surrounding the farm, which was not always one hundred per cent operational. From the get go, in this domain alone, we were basically containing the development of small farmers,” Valcov explained.

The Finance Minister emphasized that by eliminating the special constructions tax a chance will be given to the business sector.

“We also thought about the companies that have to pay this tax for some buildings or installations that, in many cases, they were no longer using or they had very low output. By eliminating the special constructions tax we are thinking of giving a chance to the business sector, the tax putting extra pressure on their expenses. There is no possibility of a new special constructions tax being introduced in Romania, at least not in the next five years,” Darius Valcov stated.

The Public Finance Minister recently announced, during the government’s weekly meeting, that the special constructions tax will be eliminated starting on 1 January 2016.

The special constructions tax was introduced in early 2014 and is applied to constructions that were previously not included in the sphere of taxation, such as poles, ramps, concrete platforms, and buildings other than the production halls and office buildings that were already taxed.


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