Global Daily Tax News, New Romanian Coalition Announces Austerity Plans, (Jun 26, 2025)

Romania's new coalition Government has set out plans to raise taxes and cut the number of public sector workers by 20 percent, to reduce the nation's budget deficit.

The Government has committed to establishing a new two-rate value-added tax regime but has yet to announce a decision on rates. It has also proposed increasing tax on dividends income and has committed to substantially broaden the base of the social and health insurance contribution (CASS), expanding it among other things to high-value pensions.

A new tax on the excess profits of banks will be introduced temporarily starting from next year, and the Government will review tax expenditures, including the use of corporate tax deductions to shift profits, listing consulting expenses charged by parent companies to branches in particular.

Substantial reforms are proposed for the tax authority, including to its organizational structure. The Government has pledged to reduce political interference and has said anti-fraud inspectors and customs staff will be vetted and required to wear body cameras when undertaking control operations.

The Government has said combating tax evasion will become a priority and tax evasion will be criminalized. The Government has also pledged to review insolvency legislation to counter phoenixing.