Business community strongly challenges tax measures

Immediately after the presentation of the tax measures package proposed by the Bologna government, the business community in our country reacted by stating that the legislative proposal is not only untimely, but also potentially destructive for the national economy.

Representatives of the beer industry, through a press release issued by the Romanian Brewers association, sounded the alarm regarding the most aggressive tax increase in recent years. They showed that, with a cumulative increase of 15% in the excise tax on beer in 2025 alone, as it comes in an unstable economic climate, with persistent inflation and a decrease in disposable income, the effects on consumption and the market will be considerable. Estimates show that the beer market could contract by up to 10% this year, and the expected budgetary gain, of only 15 million lei, is considered by those from Romanian Brewers to be marginal in relation to the losses caused. Brewers' representatives claim that the impact of this decision will be felt by small producers, distributors, growers of raw materials and especially by the HoReCa segment, which is already under pressure from the VAT increase from 9% to 11%.

Constantin Bratu, General Director of Berarii României, states: "In October 2024, after three years of successive increases in beer excise duty, completely outside the provisions of the Fiscal Code, the Romanian Government together with the producers in the sector agreed on a predictable calendar for increasing this tax: by 4.3% in 2025 and by 5% in 2026. Less than a year after this convention established by Emergency Ordinance, we are returning to the old practices that are completely unsustainable for the business environment. We do not believe that a sector or an economy can grow under conditions of predictability that, in Romania, does not manage to exceed six months. This counterproductive approach will have long-term negative effects for producers, consumers and the public budget, despite the current expectations of the authorities."

According to the press release cited, this fiscal instability, in contradiction with the promises of predictability assumed by the government less than a year ago, is perceived as a signal of distrust for investors and economic partners. The beer sector, which has contributed 5 billion euros to the state budget in the last 20 years and which does not record tax evasion, warns that such sudden and economically unfounded measures will determine the migration of consumption towards untaxed and unsafe products, with additional risks for public health.

The dissatisfaction is shared by the entire entrepreneurial environment. A recent survey, conducted by IMM Romania (CNIPMMR) on a sample of 2700 entrepreneurs, shows that 75% of them do not support the increase in the standard VAT rate to 21%, and 60% estimate an immediate increase in the price of products and services, with a direct impact on competitiveness and sales. The increase in fuel prices and excise duties, in turn, causes a decrease in profits and sales volume. The announced fiscal measures are perceived by entrepreneurs as a form of feudal-type austerity, through which the burden of the budget crisis is transferred almost exclusively to the private sector, without real reforms in the state sector.

Most entrepreneurs argue that real solutions to overcome the budget impasse must include reducing state spending, combating tax evasion, a deep reform of state-owned companies and reducing budget personnel, combined with the digitalization of the administration. Almost 70% of respondents agree with the reform of all state-owned companies, while over 88% call for a decrease in public spending as the first measure for budgetary recovery. In the absence of these measures, entrepreneurs warn that a period of economic activity restriction, company closures, increased unemployment and migration of Romanian capital to more stable and fiscally predictable markets is coming.

The government is accused of acting without a rigorous impact analysis, with short-term measures and in the absence of a long-term fiscal stability plan. In this context, the business environment is demanding the urgent adoption of a 10-year fiscal pact that would restore investor confidence and guarantee a predictable economic framework. Without a change in approach, the proposed fiscal package risks fueling a vicious circle of recession, falling revenues and deepening the structural problems of the Romanian economy.