Price hikes and cuts

Romanians will see higher wages and lower prices for some commodities as of July 1st, but they are also bracing up for higher prices of other products and services.

România Internațional, 01.07.2014, 20:17

Like every year in other European countries, July 1st brings adjusted prices for products and services in Romania as well. So the Romanians will have to pay by 2.5% more money for gas bills, as prices went up due to rising imports, which are now accounting for 10% of the consumption. Noteworthy is that at the end of last year Romania had the lowest gas prices in the European Union. To offset the effect, electricity bills are expected to drop by 2.6%.

Also as of July 1st the minimum wage will go up from 850 to 900 lei, a measure to benefit 960 thousand Romanians. But it seems to be too little too late, as they are also in for higher fines, some of which could be around 10% of the minimum gross wages. On the other hand, with minimum wages of 200 euros, Romanians are on the last but one place in Europe. In France, for instance, employees cannot get under 1500 euros worth of gross wages per month.

Ironically the Romanians fare better in terms of taxes and duties, but the good news is that government has pledged to merge or do away with 92 non-fiscal taxes and duties as of July 1st. The procedure started as early as May, when upon a government resolution and emergency ordinance, 10 non-fiscal taxes and duties were scrapped, while 17 others merged. The remaining up to 92 have been trimmed or eliminated upon orders from the minister or presidents of fiscal institutions. The taxes and fees cancelled include those on issuing a provisional passport, on providing counseling and releasing statistic data on a certain company or the fees for issuing notifications and licenses or for getting access to certain documents.

The annual budget impact of those measures is estimated at over 900 thousand lei, but the beneficial effect of the absence of administration fees for the parafiscal taxes and duties eliminated must also be taken into account. And last but not least, the price readjustment campaign is also targeting roaming services provided to the Romanian citizens who will pay between 20% and 55% less for those services through the enactment of the European regulations. The most significant price cuts will be visible in data and Internet servicesoffered by mobile phone operators.