As of April, according to the Fiscal Code, Romania has introduced a new tax on oil products, of 7 euro cents, a tax that will significantly affect the price of all transport modes, as well as transport competitiveness. One of the affected transport sectors will be railway transport, both freight and passengers.
We have analysed the situation of other railway transport systems in member states of the European Union and we have been, once again, informed that many of these transport systems don’t pay excises to diesel fuel price, on the contrary, they even have discounts so as to not endanger fair competition.
Take, for instance, Italy, where railway transport benefits from a 70% reduction of diesel fuel excise. On the other hand, in Belgium railway transport is 100% exempted from the payment of excise to any petroleum-based product, show an analysis of the Organisation for Economic Co-operation and Deve-lopment (OECD). An analysis from January 2014 of the European Commission, the Directorate General for Taxation and Customs Union (DG TAXUD), shows that in countries such as the Netherlands, Belgium, Italy, Croatia, Latvia, Lithuania, Ireland, Hungary, Austria, Poland, Portugal, Sweden, Finland, Slovenia, Great Britain and Luxembourg, railway transport benefits from discounts to the payment of diesel fuel excise. At present, diesel fuel excise can be recovered in six countries of the European Union such as Belgium, France, Spain, Italy, Hungary and Slovenia.
“During the preparation of this new tax, the political decision-makers and transport re-
presentatives met to try to reduce the negative impact of this tax and to partially or totally return it, so as not to influence transport costs. Unfortunately, railway carriers have not been invited to these meetings, maybe because we have taken a stand to the Romanian Ministry of Finances and Ministry of Transport about this tax which obviously favours automotive transportation”, states a press issue of the Romanian Railway Carriers Association (ATFER).
In some countries of the European Union, this tax is returned and railway transport operators are not charged, while in other countries that encourage eco-friendly transport, additional taxes are imposed to road traffic per km. The latest example is that of Hungary which introduced the additional road transport charge as of 1 March 2014.
“We are surprised to find out that action has been taken to partially return the fuel tax for road carriers, but not for railway carriers, a serious act which infringes fair and direct competition between transport modes”, states ATFER.
In the current context of railway transport discrimination by returning the tax only for the fuels used in road transport, we only create a more accentuated gap between railway and road transport modes. Reducing diesel fuel excise by 4 euro cents per litre applies only to some categories of carriers, but not to railway passenger carriers.
The Romanian Ministry of Finances has assumed a reduction of the fuel consumption after increasing the fuel excise and considers that the transfer of revenues from the private sector to the budget would direct funds to other investments with a higher economic growth that if the money remained in the market.
“Extending the measure on partially returning the additional fuel excise to other categories of companies than road carriers is not impossible, but it is difficult to obtain by the European Commission, which should be convinced that it is for the benefit of the economy”, said the representatives of the Competition Council at the beginning of April.
After applying the differentiated excise le-vel, the budget revenues estimated for 2014 are reduced by RON 353 Million (EUR 78 Million).
“Any recovery of part of the additional fuel excise by Romanian carriers should be fully compensated by other measures so as not to affect the fiscal objectives of the Government. The Government’s commitment for 2014 is a budget deficit of 2.2% of GDP and any fiscal initiative considered should be carefully analysed to reach this target. Also, all taxation changes should be compensated so as not to endanger this target”, commented Andrea Schaechter, Head of the IMF mission in Romania.
Share on:
