Presidential advisor warns Romania likely faces tax increases amid budget pressures

A tax adjustment or even a hike appears increasingly unavoidable in Romania, according to Dragoș Anastasiu, advisor to acting president Ilie Bolojan. His remarks, made during a public discussion on the country’s fiscal outlook, come as Romania grapples with a public deficit that exceeded 9% of GDP in 2024, and the government has delayed fiscal consolidation steps ahead of the presidential elections.

Asked whether either of the two presidential candidates - George Simion or Nicușor Dan - could realistically avoid tax increases, Anastasiu replied, as quoted by Digi24: “It will be very difficult. If we had taken steps since last year and done what we should have done in the first four months of the year, I think there was a good chance we would have avoided the tax increase.”

“There will definitely be at least a tax adjustment where it is really necessary,” he added, suggesting that the new administration will have limited room to maneuver given current fiscal imbalances.

Romania is under pressure to submit a detailed consolidation plan to the European Commission under the Excessive Deficit Procedure. The outgoing cabinet has already proposed a package that includes VAT and dividend tax hikes. Markets have responded nervously, with bond yields rising and the leu weakening following political uncertainty after the first round of presidential elections.

Anastasiu warned that failure to implement a coherent fiscal reform strategy could result in a worst-case scenario in which tax hikes are implemented simply to generate revenue without consideration for economic impact. “That would seriously damage economic growth,” he said.

(Photo source: Inquam Photos/Octav Ganea)