Finance Minister denies pressure for second rise from 21% to 23% on 2026 agenda
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Romania’s standard VAT rate rose from 19% to 21% on 1 August 2025.
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The Finance Minister 11 November said government is not considering a further rise to 23% in 2026 – despite press speculation
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But hospitality sector VAT, currently 11%, could be aligned with the standard rate of 21% in 2026.
- Rising fiscal pressures are driving the debate, including EU deficit targets and defence expenditure.
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No final decision has been made, but discussions may intensify depending on economic performance in late 2025.
See more background in our Romania VAT guide.
A second VAT rise on the table
Romania is facing renewed fiscal strain just weeks after its latest tax reforms. On 1 August 2025, the government raised the standard VAT rate from 19% to 21% — its first increase in a decade. Now, political sources suggest that the coalition government (comprising PSD, PNL, USR, and UDMR) is debating a further increase of two percentage points to 23% from 2026.
This potential move reflects concerns that recent tax hikes will not generate sufficient revenue to meet budgetary requirements. According to reports, “despite all the tax increases from August 1, the government still needs several billion lei for budget rectification.” In addition, Romania is under pressure from the European Commission to reduce its budget deficit from 2026 onwards, as part of its fiscal adjustment commitments.
HoReCa sector in focus
The hospitality sector (HoReCa) could face an even sharper adjustment. Prior to August 2025, the industry benefited from a preferential 9% VAT rate. This rose to 11% on 1 August, but the government is now considering full alignment with the standard VAT rate. That would mean a jump to 21% from 2026 — more than doubling the effective rate within just 18 months.
Industry representatives warn of significant consequences. The Romanian Hotel Industry Federation has already described 2025 as “the weakest year in the last three,” citing falling demand and rising operating costs. A further rise in VAT, they argue, could undermine the sector’s competitiveness at a time when neighbouring countries, such as Bulgaria and Hungary, continue to apply reduced rates to support tourism.
