In the context in which information has appeared in the public space announcing increases in taxes and fees, The Employers' Organization of Hotels and Restaurants in Romania – TIME and Romanian Hotel Industry Federation – FIHR I send a firm message to the new state leadership and the future government: the hospitality sector needs fiscal continuity, legislative predictability, and measures that support development, not penalize it.
The current tax model is fragile. The solution is not to increase taxes, but to collect them efficiently. The two organizations representing companies in the hospitality sector point out that changing VAT rates, introducing or increasing taxes will destabilize a sector that already operates with low profit margins and has been deeply affected in recent years by waves of crises and price increases.
Key measures considered essential:
1. Maintaining the reduced VAT rate of 9% for public catering and accommodation – This measure is essential for maintaining the competitiveness of the sector and for protecting domestic consumption. Any change to it would lead to: a decrease in activity, mass layoffs; chain bankruptcies, especially of SMEs; significant price increases; reduced investments; growth of the grey economy and stimulation of tax evasion. Tourism is the field that benefits from differentiated VAT rates in most EU member states. In the context of VAT increases, the Romanian tourism product will decrease its competitiveness compared to other countries in Europe – both domestic and foreign tourists will choose more competitive options.
The example of Germany, one of the most performing and stable European economies, shows the negative impact of abandoning the reduced VAT rate. After the entire sector switched to a VAT of 19%, restaurants were forced to increase prices by 6.5%, SMEs were severely affected, and investment and employment were slowed down. In these conditions, industry experts have shown that it is necessary to reintroduce the reduced rate to support the activity of this essential sector.
VAT evolution in Germany (2015–2025)
– 2015–2019: Standard VAT 19%, reduced VAT 7% for restaurants
– 2020: Temporary VAT reduction during the pandemic: Standard VAT 16% / Restaurant VAT 5%
– 2021–2023: Return to standard VAT 19% / restaurant VAT 7%
– 2024: Elimination of reduced rate – the entire sector switched to VAT 19%
– 2025: Maintenance of the VAT rate 19%
– 2026: Reintroduction of the VAT rate 7%
As a result of the negative economic impact, from 2026, Germany will return to the VAT rate level of 2021-2023.
2. Increasing the level of collection, through digitalization and efficient controls – The industry supports clear measures to combat tax evasion, but rejects the idea that raising taxes is the solution. A coherent legislative framework, properly applied controls and accelerated digitalization of tax reporting are needed. Digitalization of reporting will lead to the exposure of individuals/legal entities that provide services but are not controlled by the tax authorities.
3. Clarifying tax anomalies, such as the application of VAT to coffee – The VAT applied to coffee served in HoReCa establishments is still treated in a non-unitary manner, generating fiscal uncertainty and abusive interpretations. HORA calls for a clear and unitary regulation in this regard.
4. Protecting businesses – the industry is already fragile and faces declining profitability and postponed investments – Market data shows a significant decline in profitability in HoReCa. At the same time, inflation, rising labor, energy and raw material costs have led to the postponement or suspension of many development plans. The instability of tax legislation and the increase in taxes in the context of the approval of annual budgets, already based on prudent scenarios, will cause investors, already few, to drastically reduce tourism investments (renovations and construction of new hotel units), which will be reflected in the deterioration of the quality of the tourism product.
5. Application of uniform measures for all accommodation service providers – For example, in Romania we are faced with unfair competition from those who offer short-term rental services, some of whom do not declare themselves and do not pay taxes or VAT. The lack of effective control tools from public authorities leads to a lack of taxation of these activities, which would generate public revenues.
The Federation of the Hotel Industry of Romania – FIHR and the Employers' Organization of Hotels and Restaurants of Romania – HORA 
reiterates that Romania's economic development cannot be built through additional tax impositions, but through coherent measures, collaboration and investment protection.
