Cancelling the environment tax and replacing it with a tax on fuel consumption will not solve Romania’s main problem in the car sector, namely the existence of an old and polluting vehicle fleet, according to a study by PwC Romania.

Removing the tax would also mean losing about EUR 126.5 million from the environmental fund. It would cancel all the efforts made by the Cash-for-Bangers (Rabla) program in the last 12 years.

The PwC report said that introducing a tax on fuel consumption would be a “false solution”, because it would actually encourage the registration of more old polluting cars. The tax would only “worsen the problems Romania is already facing”.

The report also stated that other 19 EU member states have introduced taxes that are similar to Romania’s environment tax.

The Environment Ministry announced last week that it planned to replace the environment tax with a tax on fuel consumption, of about RON 2 (EUR 0.4) for each fill, plus a differentiated tax on cars based on the engine’s pollution level, said environment minister Cristiana Pasca Palmer. The European Court of Justice deemed the environment tax illegal.

editor@romania-insider.com