Romania's Economic Crisis: Will Tax Hikes Be the Solution?

Romania's New President Faces Economic Crisis: Potential Tax Hikes on the Horizon Romania is grappling with a significant economic crisis as its new president assumes office. The incoming government is under immense pressure to address a substantial budget deficit, and several drastic measures are being considered. A key proposal involves raising the Value Added Tax (VAT) from 19% to 21%, although a lower rate of 9% may be maintained for essential food items. This potential increase has already sparked public concern over rising prices. "The simulations show that increasing the VAT could bring in an additional 6 billion lei to the state budget," explains a news report from Realitatea Plus. However, the report also highlights the president's initial opposition to VAT increases, indicating ongoing negotiations with political parties to explore alternative solutions. In addition to VAT, the government is also exploring increases in income tax, potentially raising it from 10% to as high as 14%. These measures, while aimed at stabilizing the economy, are likely to impact citizens' finances significantly. The government's plan to tackle this economic crisis will be closely monitored in the coming weeks. The situation underscores the challenges facing Romania's new leadership as they navigate the complex economic landscape.