Romania’s PM plans to introduce a new form of car registration tax

Romania’s new prime minister Ludovic Orban announced that the Government considers introducing a new car registration tax, but only after prior approval from the European Commission.

"I think it has to be designed as a pollution tax and the tax level should depend on the amount of pollutants released into the atmosphere. This tax can also be thought of as a variable property tax, but there is again a risk that we will breach the principle that a tax depends on the value of a good," PM Orban commented on Thursday when the new minister of environment Costel Alexe officially took office, local G4media.ro reported.

Romania has introduced such a car registration tax under various forms since 2007, in principle with the purpose of discouraging the registration of old, polluting second hand automobiles. All the initiative were declared illegal by the European Commission and the Government had to return the money.

This year, out of its RON 2.4 billion (EUR 500 mln) budget, the Ministry of Environment spent RON 1.8 bln only for returning money collected in the past from car owners as car registration taxes, minister Costel Alexe stated. The former Social Democratic Party (PSD) has indeed dropped the tax, but it failed to come up with a [legal] substitute, Alexe commented.

(Photo source: Inquam Photos/Ilona Andrei)