Prime Minister Ilie Bolojan said on Wednesday that he will widen the tax base for property taxes – house and car – for individuals, mentioning that a good part of the income will remain with the local administration.

„A direct impact on the inhabitants of Romania will be the increase in the property tax on individuals. We have started a lot of construction sites in Romania. In every area in Romania, in every city or small towns, county seats, there are dozens of construction sites, but in every small town in Romania there is at least one construction site on which work is being done. All these construction sites had to be financed from national or European money. (…) We found that we no longer have funding for these works. Not entirely, but we can no longer carry them out in this formula. (…) Considering this situation, Romania’s commitments and the analyses related to property taxes on individuals, which are paid in Romania, we have taken the decision to widen the tax base for property taxes on individuals,” Bolojan told Antena 3 CNN private broadcaster when asked what measures he is considering with a direct impact on the public.

He added that the increase in taxes on individuals „may seem high in percentages, but in real terms it is an increase anyway.”

„You no longer pay, let’s say, RON 100, RON 120 for a house in the rural area, you pay maybe up to RON 200. It will be an income that will be collected by the local administration and a good part will remain with the local administration,” Bolojan said.

He added that these revenues should not go for staff spending.

„We have come up with a package through which we reduce the number of employees in the local administration, where too many have been hired. And the money collected additionally from the property taxes of the individual, plus the savings on salaries that will be made, must continue to go to these investments. Otherwise, there is no financial capacity to continue them. And then it is logical that, if you had a street that was not paved and now you have asphalt on the street or you stayed on a street that did not have water or sewerage or your locality is connected to a county road that looks very good, it is normal for the citizens of that area to also come up with co-funding for these works, which is this increase in the property tax, and we must explain this very correctly to Romanians.”

Bolojan also said that the public must be „the main treasurers, who should analyse how this money is spent and judge the mayor of that locality what happens with the money they pay.”

He showed that, in addition to the tax on the house, the tax on the small capacity car will also increase.

„For a small capacity car in Romania, a tax of RON 70 – 80 was paid, so a tax of somewhere between EUR 10 – 15 that was paid to the local administration. Now, it will probably be RON150 so it will be EUR 30, but this money is the income of the local administration, there are taxes that are collected.”

Bolojan said that out of 11.5 million automobiles currently in Romania, 10.5 million are of small capacity and paid a third of the total tax, and one million are of large capacity and paid the other two thirds. „So, for a high-capacity automobile in Romania you pay EUR 700-800 euros, which is RON 3,000 – 4,000.”

AGERPRES