Home / BUSINESS / FINANCIAL / Update: FinMin says excise duties on fuels will go up by RON 0.32/litre in two stages. Split VAT as of January 1
excise duties on fuels

Update: FinMin says excise duties on fuels will go up by RON 0.32/litre in two stages. Split VAT as of January 1

Romanian Gov’t decided to enforce double-digit hikes to excise duties on fuels to boost budget revenues. The increase of the excise tax on gas and diesel will be done in two stages, Finance Minister Ionut Misa, announced Wednesday at the beginning of the Executive meeting.

Thus, as of September 15 and October 1, the drivers in Romania will pay more by RON 0.16 per liter for each of the two phases.

“This step-by-step measure is taken not to create a shock to consumption, a shock that can generate price increases, automatically cuts consumption and can affect the state budget by lower revenues,” Misa explained.

”We’re trying to put things right. When we removed the excise, the pump price did not drop. We’re trying to put it back. If the pump price increases, we will have another discussion with the distributing and producing companies (…) We remove the excise not to bring them profit but to try to get the price down. It did not work, we put it back,” PM Mihai Tudose said recently.

He motivated that Romania needs money for infrastructure, motorways, hospitals, “for a lot of things”.

On the other hand, transporters representatives already warned that the raise of excise duties will lead to more expensive transport tickets, higher transports fees for goods, to the refuse to refuel in Romania and to protests in Victoriei Square.

Split VAT as of January 1

The split VAT payment will be enforced as of January 1, 2018, according to an energency ordinance adopted by the Government on Wednesday.

Companies may apply the system on a voluntary basis as of October 1 this year, for which they will receive tax incentives.

Thus, companies that choose ​​ the early introduction of the split VAT will benefit from a 5% cut in corporate tax, hotnews.ro reports.

In addition, companies that do not have the tax obligations up to date will benefit from penalty exemption if they pay the due VAT.

The Finance Ministry claims the split VAT mechanism will add to the budget RON 6 billion during 2018-2020, i.e. RON 2 billion per year.

The companies will have a free VAT account opened in RON with the Treasury as of January 1, 2018, based on the split VAT mechanism, representatives of the Ministry of Finance announced last Wednesday.

According to MFP, this account will be free of charge and will not generate fees or other costs.

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