February has been an active month for Romania's fiscal and economic landscape, with significant announcements and regulatory updates that businesses, particularly those in public affairs and legal departments, should closely follow.

IMF and World Bank: Stability, Not Austerity

Finance Minister Tánczos Barna provided reassuring news following meetings with IMF and World Bank representatives. Contrary to concerns, Romania will not adopt austerity measures, drastic tax increases, or immediate budget cuts. The focus instead is on reducing the budget deficit to 7% through improved efficiency and increased investments that stimulate economic growth. Barna emphasized that the 2025 State Budget assumes normal economic conditions, yet he cautioned that global economic volatility could require revisions in the future.

Tax Stability and Spending Discipline Promised by PM Ciolacu

During discussions with the Foreign Investors Council, Prime Minister Marcel Ciolacu reaffirmed the government's commitment to maintaining the current flat tax rate and VAT level. He projected a modest yet realistic economic growth rate of 2.5% for 2025. To achieve these targets, Ciolacu highlighted the need for enhanced tax revenue collection efficiency and strict control of government expenditures, aligning to keep the budget deficit at or below 7%.

Proactive Consultations with the Business Community

Interim President Ilie Bolojan initiated extensive consultations with Romania’s chambers of commerce, addressing essential tax issues, such as Form D177, which covers corporate tax and microenterprise tax redirection, as well as the importance of attracting and facilitating foreign investments. Additionally, Labor Minister Simona Bucura-Oprescu’s discussions with the Concordia Employers’ Confederation brought clarity on several key measures:

• Launch of the REGES-ONLINE system to replace REVISAL in the second half of 2025.
• Implementation of EU Directive 2023/970 on salary transparency by June 2026.
• Revision and development of 380 occupational standards.
• Piloting individual learning accounts under the Educational and Occupational Plan (PEO).
• Mandating companies with over 50 employees to hire at least 4% staff with disabilities and partner with NGOs to improve employment outcomes.

New Mechanism for Minimum Gross Wage

The Romanian government introduced a clear methodology for determining the national gross minimum wage. According to this, adjustments will align systematically with inflation rates and projected labor productivity. This reform supports broader social reform goals outlined in Romania’s National Recovery and Resilience Plan (NRRP).

Inflation Moderates, Monetary Policy Holds Steady

Romania’s annual inflation rate slightly decreased to 5% in January from 5.14% in December, suggesting stabilization rather than a significant reduction. The National Bank of Romania maintained the monetary policy interest rate at 6.5%, alongside stable lending and deposit facility rates, highlighting cautious optimism amid continuing price pressures.

European Union Omnibus Package: Easing ESG and Sustainability Reporting

Given international economic pressures heightened by geopolitical shifts, including Donald Trump's return as U.S. President and intensifying competition from China and BRICS nations, the EU has introduced an Omnibus Package aimed at reducing regulatory complexity:

• Proposed Regulation COM/2025/87 simplifies the Carbon Border Adjustment Mechanism (CBAM).

• Proposed Regulation COM/2025/84 enhances the InvestEU guarantee scheme, reducing bureaucratic hurdles for crucial investments.

• Proposed Directive COM/2025/81 streamlines corporate sustainability reporting and due diligence, significantly decreasing compliance costs and regulatory burdens.

• Proposed Directive COM/2025/80 delays mandatory sustainability reporting obligations, significantly reducing their scope. Large enterprises now start reporting in 2027, SMEs in 2028, and the reporting obligation now only covers large companies with more than 1,000 employees.

Upcoming: Clarification on the 'Pillar Tax'

A significant pending issue is the regulation of the "pillar tax," a special construction tax reintroduced in January 2025 through GEO 156/2024. Minister Tánczos Barna committed to finalizing the guidelines by the end of March 2025. Businesses, especially those with tax-exempt agricultural constructions, must closely monitor developments, as the specifics of tax application remain uncertain, potentially affecting their future financial planning.

Strategic Recommendations for Businesses

• Businesses should anticipate stable tax policies but remain vigilant regarding international economic volatility.

• Companies should promptly adapt to new labor compliance frameworks, including disability employment quotas and transparency directives.

• Continued engagement in consultations with government entities will be essential to influence and adapt effectively to emerging fiscal and regulatory landscapes.

Romania’s evolving economic agenda emphasizes stability, investment, and regulatory simplification, demanding proactive engagement from legal and public affairs professionals to ensure compliance and capitalize on emerging opportunities.

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