THE WEEK IN REVIEW
New changes in the tax code
Roxana Vasile, 05.08.2022, 16:45
New changes in the tax code
Although they are burdened by a rate of inflation that passed in the two digit area a while ago, with spikes in natural gas and energy prices, Romanians face new price hikes. Starting on August 1, new provisions come into effect through the tax code, raising prices for tobacco products and alcohol. Depending on winnings, gambling will be taxed between 3 and 40 percent. Wages in construction, agriculture, and the food industry are also affected, by lowering the threshold for tax exemptions from about 6,000 Euro to about 2,000 Euro. Also starting on August 1, employers have to pay tax at the level of minimum wage for part time workers. Most of the tax changes, however, will be applicable only starting on January 1, 2023, when VAT will go up for the hospitality industry and sugary soft drinks. Changes were also made in the calculation of building taxes. At the same time, people with standing bank loans are doling out more and more per installment. The reference index for calculating the price of consumer loans in the domestic currency with variable interest rate has reached 8.11% per year. The only recent time when this rate was higher, 8.15%, was on February 1, 2010. In early 2022, this index was less than 3% per year. Almost half of bank loans in local currency granted in Romania are currently calculated based on this index.
Romgaz strikes deal
The national natural gas company, Romgaz, said on Monday that it finalized the purchase of the 50% share package held by American consortium ExxonMobil in the Neptun Deep for natural gas extraction in the Black Sea. Right now, Romania is the EU country which is the least dependent on Russian gas, as it has large untapped natural gas deposits in the Black Sea. The estimated volume of deposits in 200 billion cubic meters. The largest of these deposits is in the Neptun Deep perimeter, which Romgaz will extract in partnership with OMV Petrom, with the first of the gas being available by late 2026 or early 2027. In the meantime, in the Midia perimeter, about 120 km away from the Romanian shore, extraction was initiated by Black Sea Oil & Gas, with the first batches delivered into the national system at this time. This week, Minister of Energy Virgil Popescu provided assurances that Romania this winter will not have problems delivering natural gas, and that it is within the EC plan for amounts stored to this end. Targets within the plan are 46% for August 1, and 57% for September 1. Romania has already covered 59% of the total required.
The biggest contract for a motorway segment in Romania
The Ministry of Transportation in Bucharest signed this week the biggest contract for a motorway segment in Romania. This is segment 3 of the A1 motorway, linking the cities of Sibiu, in the center, and Pitesti, in the south. The contract is worth over 1 billion Euro, the design will take 12 months, and the building works will take 4 years. With this signature, all five segments of the Sibiu-Pitesti motorway are underway to be designed or built. The A1 is part of the corridor between the capital Bucharest and the Nadlac border crossing point on the Hungarian border, and is part of the pan-European transportation Corridor IV.
Census wrap-up
By last Sunday, 18,150,000 people had completed the census in Romania. That was the final day of the census of people and homes, and over 95% of the estimated resident population of Romania took the questionnaire, irrespective of citizenship or ethnicity. The census was delayed by a year by the pandemic. This is an event held every 10 years, and started on February 1. The first stage was the logistical stage, then came self-review, with the last stage consisting of door to door in person interviews. As a first in Romanian statistics, data collection and processing was done completely digitally, paper free. This allows for the population of Romania to be profiled in terms of education, occupation, income, religion, ethnicity, or home situation. The purpose is to provide essential information for public, social, or economic policies, for the sustainable development of communities, for the academic sector, or for businesses. The initial partial results of the census will be made available towards the end of 2022. The final figures are expected next year.
The seventh edition of Untold
The Untold electronic music in Cluj-Napoca, in the northeast of the country, opened on Thursday for its seventh edition. It runs between August 4 and 7, and features over 200 Romanian and foreign artists, such as J Balvin, David Guetta, Hardwell, or Vini Vici. The organizers hope that they will gather a record audience. Untold is the biggest electronic music festival in Romania, and one of the top five in the world.
