Romanian Govt Reduces Car Pollution Tax Discount Rate

The Government will keep this discount opportunity, but will reduce the influence of each factor, as well as the maximum accepted discount rate, to 90%, from 95%. For instance, the coefficients associated with the car's age will be reduced to 1.01-1.04 from 1.03-1.1, while those related to the vehicle's overall condition (on the outside and inside) will be reduced to 1.05 from 1.1.

Cars without things such as air conditioning, ABS or airbags, will be eligible for a lower discount on the car tax, as the coefficients associated with these features will be reduced to 1.05 from 1.1-1.15.

The discount rates set according to the difference between the car's average annual mileage and the standard mileage for that car will be reduced significantly, to 0.5% from 1% for a difference smaller than 5,000 km, in the case of eight-seat vehicles, and to 1.5% from 3% for a difference greater than 50,001 km in the case of cargo transport cars weighing up to 3.5 tons. The average annual mileage is computed as a ratio of the mileage shown by the odometer and the car's age according to the date of its first registration.

The Government argues the lower discount will help limit the number of old, polluting vehicles on the country's roads and will stimulate their replacement with newer, greener models. It will also increase transfers to the budget of the Environment Fund and the state budget, by reducing untaxed trade in used cars, says the Government.

Late last year, the Government decided to hike the car pollution tax by an average 45-50% starting 2011. The tax rate will be set considering the age of the car, its engine size and the quantity of pollution it produces.

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