Romania braces for incoming taxes and price hikes for energy, basic foods in July
<p>Romania is set to see prices rise in July as several governmental measures limiting costs will be removed, while taxes will be hiked. Energy and food will be among those becoming more expensive.</p>
<p>The fiscal measures that the new Government is expected to announce will come into effect in two stages: some starting from July 1, and others from the beginning of 2026.&nbsp;</p>
<p>Energy prices, which so far have been capped by Government order, will see an increase that will likely hike prices in other sectors as well. The Romanian executive maintains that the vulnerable population will be protected in other ways. On the other hand, energy minister Sebastian Burduja argues that energy costs are high in Romania because the European energy market lacks cross-border connective infrastructure to equalize costs. The effect is dire for the Balkans, where energy costs can be much higher than in western Europe.</p>
<p>In addition to energy costs, the cap on commercial markups for a number of basic food items will also expire. The cap was imposed as a way of combating rampant inflation during the latter stages of the pandemic, and was <a href="https://www.romania-insider.com/romania-price-capping-scheme-food-psd-january-2024">prolonged several times</a>. Store prices are likely to change, although not dramatically. Among the products with capped markups were bread, milk, cheese, and flour, according to <a href="https://www.euronews.ro/articole/ce-masuri-fiscale-cu-efect-direct-asupra-romanilor-ar-urma-sa-fie-anuntate">Euronews Romania</a>.</p>
<p>The cap on RCA (mandatory car insurance) policy prices at the February 2023 level will also expire and will not be extended. The measure had been extended until June 30, 2025.&nbsp;</p>
<p>Moreover, homes will be taxed at market value, as property taxes will increase starting January 1, 2026, PNL leader Ilie Bolojan said. Other taxes, such as an 8.8% increase in the excise duty on cigarettes and a 20% tax on gambling, are also expected.</p>
<p>To cope with all the price hikes, people say they will cut other expenses, such as vacations. Among the hardest hit are those on a fixed income, such as pensioners.&nbsp;</p>
<p><em><a href="mailto:radu@romania-insider.com">radu@romania-insider.com</a></em></p>
<p><em>(Photo source:&nbsp;Aitor Munoz Munoz | <a href="https://www.dreamstime.com/">Dreamstime.com</a>)</em></p>