Bucharest, 22.09.2025
To: Government of Romania
For the attention of: Mr. Ilie Bolojan, Prime Minister of Romania
For your information:
Mr. Barna Tánczos, Deputy Prime Minister of Romania
Mr. Alexandru Nazare, Minister of Public Finance
Mr. Radu Miruță, Minister of Economy, Digitalization, Entrepreneurship and Tourism

OPEN LETTER
Regarding the need to maintain the reduced VAT rate on food and accommodation in the hospitality and tourism industry.

Dear Mr. Prime Minister,
Romania is facing a decision with an irreversible impact on tourism and hospitality. The HoReCa and tourism sectors are already experiencing a visible decline, with significant decreases in consumption and investments, and an increase in VAT to 21% on food and accommodation would represent a decision with an extreme and irreversible impact on this important and hard-hit economic sector in recent years, translating into chain bankruptcy for thousands of businesses, the loss of tens of thousands of jobs and a reduction in state budget revenues.
HORA, FIHR, FPIOR – the representative organizations for the hospitality industry in Romania (over 50% of the workforce according to the INS in 2023) – address a joint, firm and responsible appeal to you, in the face of a major threat to the survival of our sector.
It is a "red code" for tourism and HoReCa. Increasing VAT to 21% for food and accommodation would mean a significant decrease in consumption (according to the INS, the number of overnight stays at the end of July 2025 decreased by 4.7% compared to the same period in 2024, after 2 consecutive months of modest increases), a reduction in current activity and even a chain bankruptcy for thousands of businesses (implying the loss of tens of thousands of jobs). Paradoxically, this measure would lead to a decrease in state budget revenues by reducing the number of taxpayers, increasing tax evasion and a collapse in consumption.
Recent data from the Ministry of Finance shows an accelerated decline even before the implementation of a possible VAT increase:
• Increased operating costs caused by rising food prices, excise taxes and utilities;
• Traffic in restaurants and accommodation units has decreased by 40–50%, with some units registering decreases of up to 66%. Investments are blocked, and the number of units closed or put up for sale increases from one week to the next.
• The inability of economic operators to support the maintenance of prices from their own funds (without transferring the increases from additional taxation to the final price to the customer) – having successive tax increases in less than 2 years (VAT increased from 5% to 9%
at 11%; also, the profit/micro/specific tax increased)
• Increasing unfair competition in the field – In public catering and restaurants, the practice of evasion through the lack of a tax receipt or operating without authorization generates the same type of distortion. An increase in VAT to 21% would deepen these imbalances, penalizing honest operators and leaving room for the gray market to expand. In tourism, the uncontrolled and untaxed development of the participatory economy (short-term rented apartments) has come to represent an important segment, without contributing to the same extent to the state budget and often without the necessary approvals (for example, over 50% of the overnight stays booked on the Booking.com platform in the first 7 months of 2025 in Bucharest were in such structures, to the detriment of hotel ones).
Under these conditions, an increase in VAT to 21% for food and accommodation would generate:
1. increasing tax evasion, which will bring less budget revenue
2. price increases of at least 10% for customers;
3. a minimum 151% decrease in profit in the first year, and for many economic operators in the industry, a loss, especially SMEs;
4. the deepening of the decline in incoming tourism, through the decrease in the competitiveness of tourist packages compared to neighboring countries, combined with the lack of consistent measures to promote destinations in Romania or other public policies to support the industry (e.g., expanding seasonality);
5. significant layoffs (approximately 15% of the workforce, i.e. tens of thousands of people);
6. cessation of activity of thousands of companies. In 2024, there were 452 insolvencies in Horeca, up by 9% compared to the previous year, a level that is maintained in the first half of 2025. Already since July and August, a vertiginous increase has been observed even among large companies, so the estimates in the context of the VAT increase to 21% are bleak.
The example of Germany confirms these risks.
The increase in VAT to 19% in 2024 for restaurants resulted in price increases of 6.5% for consumers, serious damage to SMEs and job losses. Faced with obvious negative effects, Germany decided to return to the reduced rate of 7% starting with 2026. Romania has the chance to learn from this experience and avoid the same mistake. We appreciate that EU representatives know that such adjustments to public policies can help certain strongly impacted areas.
Maintaining the low VAT rate is not a privilege, but a minimum condition for survival.
The hospitality and tourism industry represents over 35,000 companies, nearly 400,000 direct and indirect jobs, and over 51% of the national GDP. A predictable and balanced fiscal framework is the only solution to protect these essential contributions to the Romanian economy.
The competitiveness of the Romanian market depends significantly on the price level.
Given that neighboring markets, such as Bulgaria or Hungary, with which we enter into direct competition, as well as most countries in the European Union, practice a low level of VAT, increasing this tax in Romania would represent an insurmountable handicap, which would drive away local and foreign tourists.
The VAT rate of 11% – a compromise solution that needs to be consolidated.
The already introduced measure to increase the reduced quota to 11% from August 1, 2025 for accommodation and public catering was the result of a responsible dialogue between the business environment and the Government.
This measure is a balanced compromise, which ensures the sustainability of the sector without affecting competitiveness. The adoption of the new VAT rate is a joint commitment agreed by operators to comply with fiscal rules and not to increase tariffs, and by the authorities to ensure
predictability.
Our call is clear and firm:
1. Abandoning any intention to increase VAT on food and accommodation at 21%.
2. Maintaining the reduced quota of 11% for food and accommodation, in line with European practice.
The real solution: better collection, not higher taxes

Romania has one of the lowest VAT collection rates in the European Union (below 65%, compared to the EU average of over 80%). A new tax increase would penalize honest taxpayers, but would not solve the real problem – tax evasion. Strengthening collection and combating
tax evasion is the real alternative to raising taxes.

We, the signatories of this letter, commit to supporting the Government by:
• correct application of VAT in all forms of accommodation and public catering;
• elimination of informal transactions;
• continued encouragement of voluntary compliance;
• respecting the records of advances and issuing invoices according to the rules.

We call on the Romanian Government and Parliament to ensure a fair and predictable fiscal framework, which will ensure the proper functioning of companies in the Romanian economy. In these difficult economic conditions, a solid and numerous base of taxpayers is needed to voluntarily participate in supporting the state budget. We assure you that our organizations are open to dialogue and will support any coherent effort for fiscal recovery, which aims at Romania's economic development.

HORA – Employers' Organization of Hotels and Restaurants in Romania
Radu Savopol – President
FIHR – Federation of the Romanian Hotel Industry
Simona Constantinescu – President
FPIOR – Federation of Hospitality Industry Employers in Romania
Valentin Soneriu – President