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| The Court of Justice in Luxembourg Rejects Romania’s Pollution Tax on Cars |
| (2011-07-08) |
| Last updated: 2011-07-11 12:51 EET |
The much-debated pollution tax on cars that Romanian authorities introduced in 2007 and amended in 2009 is contrary to EU law according to a ruling by the Court of Justice in Luxembourg. The tax may be brought in line with EU regulations provided it is applied on a yearly basis on vehicles registered for the first time in Romania, irrespective of their country of origin.
The European Court of Justice has again overturned the controversial pollution tax the Romanian authorities introduced with a view to renewing the car park, on account that it is contrary to EU law.
Although the Romanian government requested that the effect of the ruling should be time-limited, the Court decided that the Romanian Executive did not supply evidence of serious economic difficulties should the tax not be cashed in, and thus turned down their proposal.
EU magistrates explained that such a regulation discourages the import and placing in circulation of second-hand vehicles purchased in other member states. The decision follows a complaint filed by a Romanian citizen unhappy with having to pay too high a tax. Since he considered the tax to be contrary to EU regulations, he criticized the fact that it was levied only on second-hand vehicles imported into Romania from other member states and registered for the first time in Romania, and not charged on similar vehicles already registered in Romania when resold as second-hand vehicles.
Under these circumstances, the Romanian government will have to push for another amendment to the draft law so that the tax should make no discriminations between vehicles manufactured in Romania or abroad. All cars imported prior to January 1st 2007, when the tax came into effect, are to be levied a tax nearing 30% of their market value.
Romanian authorities say that all those who have already paid the pollution tax above the current level will be given the extra money back, depending on the number of applications. Romanian Environment Minister Laszlo Borbely has admitted the possibility that a single car tax should be introduced in the near future.
Even so, one thing is for certain: the controversial pollution tax is here to stay, while the number of people who are bringing the Romanian authorities to court is bound to increase. Car market experts say the Romanian government is treading a risky path, given that each regulation they introduced has been at odds with EU regulations.
In 2007, following Romania’s accession to the EU, the Romanian government introduced the tax on first registration aimed at preventing Romania from becoming the EU’s automobile graveyard.
The EU immediately threatened to launch infringement procedures against Romania, so the tax was renamed into pollution tax, while the ways it was calculated underwent several changes. With the EU courts of justice ruling the tax is discriminatory earlier this year, it will be a while before we see an end to this issue.
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