Romanian Energy Sector Facing New Tax

August 14, 2012 Taxation in Romania

New Tax For Energy Companies in RomaniaBUCHAREST – Power companies in Romania are set to face a new tax on their profits, as the government looks for means to raise tax revenues and provide subsidies to low income households.  

In an interview with the national news agency of Romania AGERPRES on August 15th the deputy Finance Minister of Romania Liviu Voinea announced that a new tax will be levied from 2013 on all energy producers who will see their profits grow after the upcoming deregulation of the national energy industry.

The revenues raised from the tax will be used to fund new programs and welfare systems to assist low income families who will be affected by the expected rise in energy prices following the deregulation. It is planned that the subsidies will be offered to individuals with monthly incomes below EUR 350. The government currently estimates that approximately 30 percent of all Romanian households will qualify for the subsidies.

Explaining the reasoning for implementing the new tax, the Minister said that it will target businesses “…that would get revenue for which they did not make new investments, no additional efforts and that are simply benefiting from … deregulation.”

The deregulation of the energy sector is one of the conditions imposed on Romania by the European Commission and the International Monetary Fund as part of the country’s EUR 5 billion aid package. According to the Liviu Voinea the IMF approves the Romanian government’s plan to impose the new tax on energy producers.

Photo by lisamurray