Romania Has Twice As Many Expensive Cars As It Does High-Earning Taxpayers

11.04.2011 By Adelina Mihai

Greece’s tax evasion, blamed by the whole of Europe as a source of the Greek government’s excessive indebtedness, has been shown by the Athens press to be reflected in the fact that the number of Porsche Cayenne registered, which cost EUR80,000, is higher than the number of employees earning more than EUR50,000 per year. But how do things stand in Romania, where even officials allow for a higher degree of tax evasion?

ZF calculations reveal that around 5% of the 4 million cars registered in Romania are worth more than EUR20,000. This means that in Romania there are now 200,000 cars worth more than EUR20,000.

The EUR20,000 mark was chosen because this is the highest reference point that the National Statistics Institute takes into consideration for income earners.

At least 40,000 Romanians earn over EUR20,00 per year, but the number of new cars bought for more than EUR20,000 sold over three years (2008-2010) is nearly 73,000.

Basically, to every citizen earning more than EUR1,900 gross per month correspond two cars exceeding their annual income. How can these discrepancies be explained?

"It is obvious that the official number of high income earners registered with the National Statistics Institute can reflect reality to a larger or smaller degree. There are a lot of people who earn income from other sources. With an underground economy estimated at 30-40% of GDP, how can there not be more expensive cars than normal?," believes Sorin Roibu, managing partner of executive search and human resources consultancy Arthur Hunt.

The number of Romanians earning high incomes can exceed official statistics, though not by much, considering that companies also use management contracts in addition to individual employment contracts to pay their employees.

"Generally those who earn more than EUR2,000 per month hold managing positions (with the exception of certain specialists) and get a company car. Those who buy cars of over EUR20,000 are generally well-paid specialists, earning between EUR1,500 and EUR2,000 on average," believes Horatiu Cocheci, manager of the human consultancy division of audit and consultancy firm PricewaterhouseCoopers (PwC).

(English version by Daniela Stoican)