Romania's tax agency meets revenue collection target in H1 2024, but deficit swells

The Romanian National Agency for Fiscal Administration (ANAF) has surpassed its revenue collection targets for the first half of 2024, collecting an additional RON 1.2 billion (EUR 240 mln) beyond the initial goal. Finance minister Marcel Boloș announced that ANAF achieved a 100.6% fulfillment rate of its budget revenue collection program.

The tax agency collected revenues of RON 218.5 billion, a 17.8% (or RON 33 bln) increase compared to the same period in 2023. The increase in VAT collection was also significant – RON 6.58 bln, reflecting a 15.6% growth.

Boloș highlighted the continuous efforts for efficient collection and combating tax evasion, emphasizing the role of digitalization in enhancing ANAF's operations. He noted that digital measures (such as e-invoice and e-VAT), though sometimes challenging, have made tax inspections less burdensome for taxpayers and more cost-effective for ANAF.

The net revenues collected by ANAF in the first half of 2024 represented 12.37% of GDP, an increase of 0.82 percentage points from H1 2023.

Key revenue increases were noted in health insurance contributions (up RON 8.33 bln, 38.3%), social security contributions (up RON 6.64 bln, 13.9%), VAT (up RON 6.58 bln, 15.6%), profit tax (up RON 2.78 bln, 21.8%), and income tax (up RON 4.14 bln, 20.1%).

In June alone, ANAF collected net budget revenues of RON 43.36 bln, a 17.7% increase from June 2023.

Despite the higher tax revenues, the budget deficit also widened in the first half of this year to approximately 3.6% of GDP, compared with 2.34% of GDP in the same period of 2023, according to Profit.ro.

Prime minister Marcel Ciolacu explained that the higher deficit is due to larger public investments financed in the first half of this year.

Considering this, new estimations indicate that Romania's budget deficit could climb to almost 7% of GDP this year, significantly above the public target of 5% of GDP.

PM Ciolacu said he would negotiate with the new European Commission a gradual reduction of the deficit over the next 7 years.

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