Romania’s government to hike taxes on fuel, cigarettes to bring down budget deficit

Romania’s finance ministry says it will hike taxes on fuel and other goods in a bid to narrow a burgeoning budget deficit.

The move is expected to lead to higher inflation, which rose to 3.8% in November, one of the highest rates in the European Union.

Romania’s budget deficit will be about 4.4% this year, far beyond the EI recommended ceiling of 3%.

The new Liberal government has promised to cut public spending, racked up by the previous Social Democrat government which lowered taxes, raised public sector salaries and boosted the minimum wage.

Under the news prices, consumers will pay up to 5 lei more for a 40-liter tank, Hotnews news site quoted a tax adviser, Adrian Benta, as saying.

A liter of lead-free gas costs about 5.81 lei while diesel retails at about 5.95 lei. Taxes on lead-free gas will jump from 2,339 lei/1,000 liters to 2,428 lei, and from 1,896 lei/1,000 liters to 1,968 lei for diesel.

Even if the hikes aren’t steep, the fuel prices will have a knock-on effect on transportation and other costs fueling inflation.

For large trucks with a 400-liter tank, it will cost 34 lei more for a full tank.

The ministry will also hike taxes on cigarettes and beer. Tax on cigarettes will increase from 483.74 lei to 500.8 lei per 1,000 cigarettes.


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