In the context of fiscal measures planned for 2025, the Romanian authorities are analyzing several scenarios to reduce the budget deficit and increase budget revenues. One of the measures discussed is an increase in the Value Added Tax (VAT).
VAT increase:
• Standard rate: An increase in the standard VAT rate from 19% to 21% or even 25% is being considered. This measure could be implemented in the second half of 2025 or early 2026, depending on the evolution of the budget deficit. 
• Essential products: There are discussions about maintaining a reduced VAT rate for basic food and medicines, to protect vulnerable groups. 
Other proposed tax measures:
• Income taxation: The introduction of a 20% income tax or a progressive taxation system is being considered, with the aim of increasing tax equity.
• Taxation of micro-enterprises: It is planned to reduce the eligibility threshold for the turnover tax regime to 88,500 euros, thus aligning it with the VAT threshold.
• Elimination of tax incentives: It is intended to eliminate some existing tax exemptions and incentives, in order to ensure a broader tax base and higher budget revenues.
• Additional excise duties: Introducing excise duties on high-sugar drinks, depending on the sugar concentration, to discourage the consumption of unhealthy products.
Property taxation:
• New IT system: Implementation of an IT system for property valuation and taxation, based on updated real estate market values.
• Increase local taxes: Increase property taxes, in line with new assessments, to more accurately reflect market values.
Tax and fee administration:
• Digitalization: Development of a taxpayer profiling system and implementation of early detection mechanisms for VAT fraud.
• Improving collection: Measures to combat tax evasion and reduce the tax collection gap.
Public spending and payroll:
• Freezing public sector salaries: Public sector salaries will be frozen until the adoption of the Ceilings Law, and increases will remain at the December 2024 level throughout 2025.
• Compensation for overtime: Overtime will be compensated with time off, similar to the provisions of 2024.
Other measures:
• Suspension of vacation vouchers: Budget employees will no longer receive vacation vouchers in 2025, including employees in institutions such as Public Radio and TVR.
• Postponement of some projects: The establishment of the Agency for the Quality of Marketing of Agri-Food Products will be postponed until January 1, 2026.
These measures are under analysis and have not yet been officially adopted. Their implementation will depend on the evolution of economic indicators and political decisions to be taken in the coming period.
