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The Ministry of Finance yesterday made the legislative package on fiscal-budgetary measures aimed at reducing the current budget deficit transparent, a package that provides for doubling the bank turnover tax, increasing VAT, increasing excise duties and other taxes, as well as budget expenditure cuts.
After the publication of the legislative proposal, Deputy Prime Minister Tanczos Barna, former Minister of Finance, said: "The accelerated growth of public debt and the budget deficit must be corrected in the immediate future. The budget deficit is unsustainable without recovery measures. We are pressed for time, we had a period with many elections, in which Romania assumed these fiscal-budgetary corrections through documents. In negotiations with the European Commission, with those from Ecofin and with the rating agencies, their representatives told us that the first options we presented were not sufficient, so we developed this package of fiscal measures.”
In turn, Alexandru Nazare, Minister of Finance, said: "The fiscal package has no political color, it is a package that protects Romania. Through all the measures, today is the first stage, we will try to ensure that these measures equally target all areas. There was no alternative to not taking measures. If we did not take these measures, we would be forced to take double them in 3 months. Through this fiscal package, we avoid three extremely important risks. The first risk is related to the suspension of European funds, cohesion and PNRR, given the procedure launched by the Commission in January 2025 because we did not take corrective actions. I mention that the basis of this procedure was already approved, and the next steps, if we had not adopted this package, would have been for the procedure to go further and its end would have meant penalties on European funds, cohesion and PNRR. Basically, we are saving these European funds from suspension by transmitting a fiscal package that has the scope that the Commission requires. The second thing: we preserve the qualification of investments. The last time this happened in Romania, it had many consequences: a large devaluation that affects the entire population, not just the state's ability to borrow. Thirdly, strategically, we are opening the way for the negotiation of loans from the PNRR. I'll give you an example: the simple fact that we published the package today influenced the auctions that were underway. If we had lost our investment grade, we would have diminished our freedom of economic decision and our ability to borrow on the markets. (...) The representatives from the rating agencies begin the analysis after July 15. I am very optimistic that once we have the validation obtained in the Ecofin Council (ed. - the next meeting takes place on July 8) we will maintain our rating with Fitch”.
According to the Minister of Finance, the positive budgetary impact for the second semester of 2025 of this first proposed fiscal package would amount to 10.74 billion lei (+9.49 billion lei in revenues, the rest meaning a reduction in public spending), and next year to 92.6 billion lei (+35.25 billion lei in revenues, to which is added a 57.35 billion lei reduction in public spending).
• Without increasing the taxation of stock market transactions, but with doubling the tax on turnover in the banking system
At first glance, we noticed that the proposed measures do not include the taxation of stock market transactions, more precisely the increase to 10% of the tax on the gains resulting from these transactions. Although the measure did not enter this stage of amending the tax legislation, it is possible that it will enter the second stage or not enter at all, on the grounds that perhaps the initiators of the measure have realized that it is not a wise one.
Instead, the Government proposes a broad set of fiscal-budgetary measures, centered on doubling the turnover tax in the banking system, increasing dividend taxes, drastically increasing taxes in the gambling industry, increasing excise duties and a re-establishment of VAT rates, with the declared aim of fiscal consolidation.
According to the draft regulatory act, credit institutions will practically pay a 4% tax on turnover starting July 1, 2025 (compared to 2% until June 30, 2025), a measure that, according to economic and financial experts, will have an effect on lending and interest charged to clients of the financial-banking system, whether we are talking about individuals or legal entities. In the capital market, only the tax rate for dividend income is being increased. This will increase from 10% to 16% and will be applicable too for income from dividends obtained by foreign individuals resident in Romania.
Regarding VAT, the standard rate will be increased from 19% to 21%, marking a significant change in Romania's fiscal policy. At the same time, the reduced rate of 5% is eliminated, being replaced by an 11% rate applicable to operations that previously benefited from the preferential regime of 5%. These include the delivery of school textbooks, books, newspapers and magazines, cultural services such as access to museums, castles, memorial houses, historical, architectural or archaeological monuments, but also the delivery of firewood and thermal energy in the cold season to certain categories of consumers. In parallel, the reduced rate of 9% is also modified, being increased to 11%, but applicable to a limited range of goods and services, including medicines for human use, food intended for human consumption with specified exceptions, water for irrigation, fertilizers and pesticides, water supply and sewage services, buildings used as nursing homes, children's homes or rehabilitation centers for disabled minors, as well as accommodation and restaurant or catering services. The HoReCa sector will be monitored between August 1 and October 31, 2025, and depending on the evolution of receipts and the results of the analysis carried out, a decision will be made later on the VAT rate that will be applied to this area.
• Gambling - overtaxed, new excise duties introduced
Taxation of gambling income is also substantially modified. Withdrawals under 10,000 lei will be taxed at 10%, those between 10,000 and 66,750 lei at 20% for the part exceeding 10,000 lei, and those over 66,750 lei at 40% for the part exceeding this threshold. In addition, a vice tax of 500 euros per month is introduced for each gambling machine and 20,000 euros per year for each casino organization license.
Regarding the excise tax regime, one of the main changes is the extension of the application of excise taxes for still beverages with an alcoholic strength greater than 0.5% starting with January 1, 2026, except for those obtained from grapes or apples. Thus, the price of wine - which until now did not contain any excise duty, except for sparkling wines - will include an excise duty of 76.19 lei per 100 liters, which will increase to 83.81 lei per 100 liters from January 1, 2026. The same excise duty value will also be introduced for cider, mead and other fermented beverages obtained from berries without other added flavors or alcohol. The excise tax will also increase on beer, from 4.62 lei per hectoliter (100 liters) to 5.30 lei per hectoliter for the rest of 2025 and 5.83 lei/hl starting January 1, 2026.
Tobacco products are not exempt from the excise tax increase, with the excise tax set to be, for example, 703.47 lei/1,000 cigarettes in the second half of this year and 718.97 lei/1,000 cigarettes in 2026. The excise tax will also increase for cigarettes, but also for raw tobacco.
The excise tax on gasoline and diesel is increasing this year by percentages between 65 and 67% per ton compared to last year, and from January 1, 2026, the excise tax will be higher by almost 85% compared to December 31, 2024.
The proposed tax package also includes the payment of a 10% percentage to CASS for pensions exceeding 3,000 lei. The tax will apply only to the difference between the pension established in payment and the minimum value of 3,000 lei. Individual taxpayers who obtain income from rent, lease or intellectual property rights will also be subject to the obligation to pay the health contribution under the new grid.
The legislative package also includes an increase in the toll, i.e. the tax for using the national road network in our country. From September 1, 2025, the rovignette will cost 3.5 euros for one day, 6 euros for 10 days, 9.5 euros for 30 days, 15 euros for 60 days and 50 euros for 12 months. Currently, the rovignette for one day costs 2.5 euros, the rovignette for 10 days - 3.3 euros, for 30 days - 5.3 euros, for 60 days - 8.4 euros and for 12 months - 28 euros.
The budget consolidation measures also affect the area of budget expenditures. Thus, it is proposed to cap the amount of the food allowance established in the central administration for all categories of budget personnel, as well as to grant vacation vouchers only to employees whose net monthly income is less than 6,000 lei, excluding all those who exceed this threshold. Expenditures on the purchase of furniture, equipment and vehicles will be prohibited, except for those carried out through non-reimbursable external funds or the replacement of worn-out or worn-out equipment. Retirement benefits will be capped at three basic salaries corresponding to the position held at the time of retirement.
Also in the sense of reducing expenses, a ban is introduced on employment through competition or examination of vacant positions in public institutions by the end of 2025. It establishes the obligation for all budgetary entities to conduct an external audit by December 2025, and the hiring of new people will only be possible with justification regarding the need for the position and the approval of the Ministry of Finance.
In the field of remuneration, it is provided for a limitation to a maximum of two monthly allowances for activities in the boards of directors or supervisors, regardless of the number of positions held. For personnel involved in projects financed from non-reimbursable external funds, the increase of up to 50% of the basic salary will be granted only in proportion to the actual time allocated to these activities, and in the absence of an approved budget, the increase will be limited to 30%.
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