The introduction of higher excise duties as of April 1 has upset both consumers, who are rushing to buy cheaper products while they can, and companies, who are trying to adjust their business plans to account for the new taxes. The increase will affect cigarettes, alcoholic drinks of all types, petrol and diesel, cars, various electronic devices and electrical home appliances (including reintroduction for digital cameras), electricity and natural gas.
More expensive petrol and electricity are also likely push inflation higher in April to 1-1.5%, a level, which will be hard to contain during the summer months.
Through an emergency ordinance modifying the Fiscal Code on Thursday, the government decided on a series of advance rises for excises in order to plug part of the gap in the budget that emerged after the introduction of the single quota, through which it hopes to raise 16,000 billion ROL (420 million euros). These revenues will also have to cover the budgetary losses caused by the evolution of the euro, given that this year's state budget anticipated an exchange rate of 42,550 ROL to the euro, while current estimates point to an average of 37,500 ROL.
The new excises values, 13.5% higher than originally estimated, will come into effect on April 1 2005.
In the wake of the recent announcement of the reintroduction of excises for digital cameras, Media Galaxy stores enjoyed a 25-30% boost in customer numbers, while sales of digital cameras tripled, according to officials from the Altex group, which owns the Media Galaxy brand.
Other products that will come under the new excises also witnessed increased sales: 60% higher for microwave ovens and 20% for air conditioning units, the Altex representatives added. The news about reintroduction of excises took Romanian distribution companies by surprise, according to the IT industry.
Altex officials believe that prices for product categories that come under the new excises will rise when the new regulations are implemented and stocks of products are renewed.
According to Dan Topala, deputy chairman of Flamingo International, the introduction of excises will boost the "grey" market. "An increasing number of Romanians will choose to buy this equipment from abroad".
The cigarette and alcoholic drinks markets, which have a cumulated annual value of about 1.6 billion euros, will suffer considerable shocks. Gheorghe Iaciu, chairman of Global Spirits Ploiestu, an important player on the alcoholic drinks market, says the higher excises will lead to price rises of up to 35% in the industry. mihai.musatoiu@zf.ro ; stelian.negrea@zf.ro
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