Final draft of the tax bill: special taxes for people with expensive cars and houses, new excise duties on tobacco

The government published, on Tuesday, the final form of the package of fiscal measures for which it will assume responsibility in Parliament. Special taxes are introduced for people who own houses more expensive than 500,000 euros and cars whose value exceeds 75,000 euros. The final form also provides for new excise duties on tobacco products. MPs s have only a few hours to submit amendments, as the Parliament is convening today at 6:00 p.m. for the assumption of responsibility by the Government.

The bill regarding some fiscal-budgetary measures to ensure Romania’s long-term financial sustainability, published in full on Tuesday on the Government’s website, provides, among other things, new excise taxes for tobacco products and a special tax on immovable and movable assets of high value.

The Government submitted to the Parliament the draft law on “stopping the budget waste”, combating evasion and ensuring fiscal equity, and will assume, on Tuesday, the responsibility in Parliament on this draft in a joint session of the two Chambers. Compared to the form released for public consultation by the Ministry of Finance, a series of amendments were adopted.

Bank turnover tax doubled – the new rate is 2%

Coalition leaders met at Victoria Palace on Tuesday to finalize the final shape of the draft tax measures. So, many of the provisions have been changed on the fly. One of the new provisions concerns the taxation of banks, which should pay a tax of 2% on turnover in 2024 and 2025. In the initial version of the assumption project, the tax for banks was 1%.

Special taxes for Romanians with expensive houses and cars

Also, the obligation to pay a special tax on immovable and movable assets of high value has been established. Thus, the following are obliged to pay the special tax on immovable and movable assets of high value:

a) natural persons who, on December 31 of the previous fiscal year, own/jointly own residential buildings located in Romania, if the taxable value of the building, calculated according to art. 457, exceeds 2,500,000 lei – i.e. 500,000 euros.

b) individuals and legal entities who own cars registered/registered in Romania whose individual purchase value exceeds 375,000 lei – i.e. 75,000 euros.

The special tax on immovable and movable assets of high value is calculated depending on whether they fall into one of the situations provided for in art. 5001, as follows:

a) in the case of properties representing residential buildings, by applying a rate of 0.3% on the difference between the taxable value of the building communicated by the local fiscal body through the taxation decision and the ceiling of 2,500,000 lei;

b) in the case of properties representing cars, by applying a rate of 0.3% on the difference between the purchase value and the ceiling of 375,000 lei.

New excise taxes for tobacco

The final form concerns the granting of meal vouchers, VAT for tickets to shows and sports events, as well as the calculation of the tax for multinational companies, announced the spokesman of the Executive, Mihai Constantin, on Monday, in a press briefing.

At the same time, as approved by the Government, the draft law provides for the application of non-harmonized excise duties, as special taxes, for several products with low risk potential:

a) products containing tobacco, intended for inhalation without burning, with tariff classification NC 2404 11 00, including those contained in supplies delivered together with electronic cigarettes and other similar personal electric vaporizing devices of CN code 8543 40 00;

b) liquids with or without nicotine, intended for inhalation without burning, with tariff classification NC 2404 12 00, 2404 19 90, including those contained in reserves delivered together with electronic cigarettes and other similar personal electric vaporization devices from NC code 8543 40 00;

c) products intended for inhalation without combustion, containing tobacco substitutes, with or without nicotine, with tariff classification NC 2404 12 00, 2404 19 10, including those contained in supplies delivered together with electronic cigarettes and other similar personal electric vaporization devices of to the NC code 8543 40 00;

d) non-alcoholic drinks with added sugar for which the total sugar level is between 5g – 8g/100ml; e) non-alcoholic beverages with added sugar for which the total sugar level is over 8 g/100 ml.

Measures to reduce the budget apparatus

As economic-financial measures related to public authorities/institutions, the project provides that the total number of approved public dignity positions related to the positions of secretary of state, state adviser, undersecretary of state, vice president and the functions assimilated to them are reduce until January 1, 2024 by at least 25%.

Also in this chapter, the draft states that “the total number of public management positions within the public authority or institution, with the exception of the public positions of general secretary of the administrative-territorial unit / subdivision, as well as public management positions whose occupation it is done by secondment with personnel from the institutions of the defense sector, public order and national security, according to the approved organizational states, under the law, it is a maximum of 8% of the total number of positions approved at the level of principal credit officer.

As for the increases, the project provided that “in relation to the working conditions in which the activity is carried out, dangerous or harmful conditions, the salaried staff can receive an increase of up to 15% of the basic salary, but not more than 1,500 lei monthly gross, corresponding to the time worked at the respective workplaces, in compliance with the legal provisions in force”. Through the same project, maximum limits are established regarding the purchase of mobile phones by public institutions and fuel consumption.

Draft law to be challenged at CCR

USR and Forța Dreptei, both in opposition, have announced that they will attack at the CCR the package of fiscal measures for which the Government wants to assume responsibility in the Parliament. “Ciolacu violates the law and the Constitution in order to feed the party clientele,” says USR leader Cătălin Drula. The notification will be submitted by the USR and Forța Dretei.

The president of the USR also argues that the law for which Marcel Ciolacu wants to take responsibility violates the Constitution and several laws in force, including the Fiscal Code and the Fiscal Responsibility Law.

The two parties claim that they will also include dozens of unconstitutionality objections written even by specialists from the Ministry of Justice, but ignored by PNL minister Alina Gorghiu. The attack on the CCR is the sure way to prevent the “Tax Increase Law” from entering into force on October 1, according to the signatories of the notification.

“Practically, at this moment, Marcel Ciolacu governs by decree. And then we go to the reasons related to double taxation, to the fair settlement of the tax burden. All the principles of law and the principles of fiscal responsibility of a state are trampled in the name of feeding the party clientele with the money needed for those trunks that we have seen these days. Millions and billions of lei are looted from the state budget and Marcel Ciolacu is attacking the national economy, he is attacking the private environment, he wants to take their money, put it in the trunk of these people”, states Cătălin Drula.