Prime Minister Marcel Ciolacu Rules Out VAT Increase, Focuses on Reducing Inflation

Prime Minister Marcel Ciolacu confirmed that the government will not increase the VAT rate, emphasizing that a one percentage point hike would automatically raise inflation by 0.5 percentage points, CE Report quotes Agerpres

Speaking after a meeting with the Finance Minister, Ciolacu explained that Romania is committed to fiscal reform as outlined in the National Recovery and Resilience Plan (PNRR). The reform has been reviewed by the European Commission, the Romanian Government, and the World Bank, which has provided consulting support.

"We will not increase VAT because it would equally burden all Romanians, regardless of income, leading to reduced purchasing power. I will not allow this," Ciolacu stated, adding that the Finance Minister shares this stance.

The Prime Minister also projected a decrease in inflation, following the holiday season and recent wage and pension increases. He noted that the government’s focus is now on macroeconomic stabilization and reducing inflation, reiterating that VAT hikes are off the table.

Ciolacu confirmed that the 2025 budget was prepared without tax increases and hinted at the consideration of progressive taxation on exceptional incomes as part of fiscal reform measures.