Romanian government reportedly considers VAT hike to 23% in 2026 as last-resort measure

Romania’s governing coalition of PSD, PNL, USR, and UDMR is considering raising value-added tax (VAT) by two percentage points to 23% in 2026 if budget revenues fail to increase significantly, Libertatea.ro reported on September 1, citing political sources.

Another option under discussion is the alignment of the VAT rate for the HoReCa sector with the standard rate. The sector’s VAT was set at 9% before being raised to 11% on August 1, but authorities are debating a further increase to 21% from 2026. Hoteliers have warned that 2025 has already been “the weakest year in the last three.”

No final decision has been made, but discussions could intensify depending on the economy’s performance in the coming months.

The government is under pressure to find additional funds for 2026, after already implementing several tax increases this summer. According to coalition sources, “despite all the tax increases from August 1, the government still needs several billion lei for budget rectification. And starting next year, the budget deficit must be further reduced according to the plan agreed with the European Commission.”

Rising expenditures, particularly on defence, add to the fiscal strain. The government’s projections assume that public sector wages and pensions will remain frozen in 2026.

(Photo source: Inquam Photos/Octav Ganea)