Romania enters 2025 in an extremely strained budgetary position. The deficit remains among the largest in the European Union, while pressure from the European Commission to reduce fiscal imbalances is becoming increasingly intense. The government faces very difficult choices: cutting spending, raising revenue through new taxes, or adopting a combination of both strategies.
Against a backdrop of geopolitical instability, successive price rises, pressure on the pension system and insufficient investment, Romania must find swift solutions. This article examines the current budgetary situation in detail, why the deficit is so high, and all the new taxes and fiscal measures introduced in 2025 for individuals and companies.
1. What does Romania’s budget look like in 2025?
Romania’s budget is based on higher projected revenue than in previous years, driven by forecast economic growth and intensified tax collection. Even so, the budget shortfall remains enormous.
The budget deficit: the No. 1 problem
Romania continues to have one of the EU’s largest budget deficits, at between 5.5% and 6.3% of GDP, depending on the economic scenario. Although the country has been under the excessive deficit procedure since 2019, corrective measures have proved insufficient.
The main reasons for the high deficit are:
- the rapid increase in social spending (pensions, wages and social assistance);
- extremely low tax revenue (Romania has the EU’s lowest collection level—only 27.7% of GDP);
- large-scale tax evasion, especially involving VAT and undeclared work;
- high budget expenditure on investment, defence and energy;
- rising interest costs on public debt.
The impact of the war and the international context
The war in Ukraine has direct effects on the Romanian economy:
- additional military costs;
- spending to secure the eastern border;
- support for Ukraine through energy and trade corridors;
- higher costs for energy and technology imports.
In addition, EU pressure to reduce the deficit in 2025–2027 requires the government to introduce a substantial package of new taxes.
2. New taxes and fiscal measures in 2025
To stabilise the budget, the government is introducing a series of major tax changes in 2025. They affect both individuals and companies, focusing on large corporations, real estate, tourism, services and micro-enterprises.
2.1. VAT changes in 2025
VAT has undergone the most changes in recent years. The new legislation provides for:
- an increase in the standard VAT rate from 19% to 21%, applying to most goods and services;
- the removal of certain reduced VAT rates for products deemed “non-essential”;
- an increase in VAT on sweets and sweetened drinks from 9% to 19–21%;
- an increase in VAT in the hospitality sector from 9% to 12%;
- a 5% VAT rate limited to new homes below a certain threshold (RON 500,000).
These increases are estimated to generate additional annual revenue of more than RON 12 billion.
2.2. Property taxes: significant increases
The new property-tax system, based on market value rather than the 2016 valuation grid, takes effect in 2025.
The main changes are:
- local taxes rising by 20–35% in major cities;
- an additional tax on homes worth more than €500,000 (0.3% per year);
- higher taxes on rented buildings, between 0.2% and 1% of the property’s value;
- a new tax on unoccupied or abandoned homes.
Municipalities will therefore have much higher revenue, but residents will face higher costs, particularly in major cities.
2.3. Taxes for micro-enterprises
The micro-enterprise regime is changing again. From 2025:
- the 1% tax applies only up to turnover of €60,000;
- between €60,000 and €300,000, the tax is 3%;
- above €300,000, a micro-enterprise automatically becomes a standard company (16% tax).
The IT, transport, construction and trade sectors will be the most affected.
2.4. Social contributions: gradual increases
The government has introduced a series of changes to the pension and contribution system:
- an increase of 1 percentage point in the health contribution (CASS);
- public-sector pay rises offset by additional taxation;
- a solidarity tax on high salaries: 2% above RON 18,000 per month;
- increases in pension contributions (CAS) for certain self-employed activities.
2.5. Higher excise duties
Excise duties rise in 2025 on:
- fuels: +RON 0.45 per litre;
- alcoholic beverages: +10%;
- tobacco: +13%;
- luxury goods: an additional excise duty of 5–10%.
These increases are why petrol and diesel exceed RON 8 per litre in pessimistic scenarios.
2.6. New taxes for large companies
In line with EU recommendations, Romania is introducing a 15% minimum corporate tax from 2025 for companies with turnover above €750 million.
There will also be:
- an additional tax for energy companies;
- taxes on exceptional profits (“windfall tax”);
- a digital tax for technology companies;
- a tax on streaming platforms.
3. How do these taxes affect the public?
The public will feel the impact of the new measures directly. Prices for basic goods will rise, and the cost of living in large cities will increase considerably.
A chain reaction of price rises
Higher VAT and excise duties lead to price increases in:
- food: +5–12%;
- beverages: +10–20%;
- transport: +10%;
- energy: +7–10%;
- services: +8–15%.
The burden on the middle class
The urban middle class is the most affected because of:
- higher home taxes;
- the solidarity tax;
- more expensive loans and repayments;
- rising living costs.
The impact on rural areas
Rural areas are less affected by taxes, but more affected by:
- higher fuel prices;
- rising agricultural production costs;
- the potential increase in the prices of machinery and fertilisers.
4. How are companies affected?
The new taxes put pressure on businesses, especially micro-enterprises and SMEs. The sectors most affected are:
- transport;
- construction;
- trade;
- services;
- IT;
- tourism and hospitality.
Most entrepreneurs fear greater fiscal unpredictability, which discourages investment.
5. The government’s medium-term proposals
- digitalising ANAF;
- combating VAT tax evasion;
- implementing electronic invoicing;
- automated collection of contributions;
- reducing bureaucracy;
- investment in digital infrastructure.
If these measures are implemented properly, tax collection could increase by RON 20–25 billion a year.
6. What lies ahead for Romania?
2025 is a decisive year for fiscal stability. It is possible that:
- further tax adjustments will be introduced by 2026;
- an expanded wealth tax will be introduced;
- taxes on the real-estate sector will increase;
- the micro-enterprise system will be revised;
- “green” taxes for industry will emerge;
- VAT will reach 22% if the deficit does not fall.
In short, 2025 will be a year of major fiscal transformation, and the public and businesses must prepare for continuing change.
Romania’s budget is under enormous pressure, and the government is seeking to reduce the deficit through a combination of new taxes, tax increases and fiscal digitalisation measures. For Romanians and companies, this means a challenging year, marked by rising prices, new tax obligations and an economy in constant transformation.
For more information on the economy, see The energy crisis and new measures for Romanians in 2025: everything you need to know, which provides complementary details on this topic.
There are opportunities, however: modernising tax collection, European investment and the digitalisation of public administration could help Romania achieve long-term stability if reforms are implemented effectively.
