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Romania to change disputed tax on cars

Romania will change a disputed tax on cars designed to keep out second-hand vehicles after the European Union warned that it violated the bloc's trade rules, the finance minister said Wednesday.

Varujan Vosganian said the first registration tax, which ranges from about €140 ($191) for a new car to up to €7,000 ($9,500) for an older vehicle, would be changed to conform to EU rules. Taxes on older cars would now be drastically reduced, but cars would be taxed according to how much they pollute, Vosganian said. The EU had threatened to take Romania to court if it refused to change the tax, saying it violated free trade rules within the bloc. The tax is backed by local carmakers and new car dealers, but is unpopular with many Romanians who want to buy cheaper cars. The country's largest carmaker, Renault-owned Dacia, warned that its sales could fall by 50% if the tax is scrapped. (