Travellers can feel the pinch as Romania pushes VAT, duty hikes to avoid credit downgrade
Dubai: If you’re planning to visit Romania this year, be prepared to spend a little more. The Romanian government is pushing through a set of tax hikes starting next month that could impact the cost of everything from restaurant meals and fuel to hotel stays and alcohol.
The move comes as officials in Bucharest race to stabilise the country’s growing budget deficit and avoid a downgrade in its credit rating, which would make it more expensive to borrow money and could further strain the economy.
Here’s what’s changing that might affect your trip:
VAT (Value Added Tax) is set to increase on a range of goods and services—including food, dining, and transport.
Excise duties on alcohol, tobacco, and fuel are rising—expect higher prices at bars, restaurants, and petrol stations.
General prices are likely to edge up due to inflationary pressure as businesses pass on costs to consumers.
While Romania is still one of Europe’s more affordable destinations, especially compared to Western Europe, these changes could slightly increase travel costs—particularly for longer stays or budget-conscious visitors.
The government is trying to raise over 35 billion lei ($8.1 billion) by 2026 through these tax hikes. The reforms are part of a broader effort to keep Romania’s finances in check and reassure investors.
Without them, the country risks falling below investment-grade status in credit ratings—something that could weaken its currency and hurt long-term economic prospects.
However, the new taxes have not gone down well with locals. Public-sector workers have taken to the streets in protest, worried about shrinking purchasing power and rising living costs. Union leaders and employers have criticised the speed and scope of the changes.
Romania already has one of the highest inflation rates in Europe at 5.5%, and economists expect that to climb to around 8% in the coming months. This means prices could keep rising through the rest of the year, although the government hopes the spike will be temporary.
Despite the challenges, investors are showing cautious optimism. Bond yields have fallen slightly, indicating that the reforms may be seen as a necessary move to restore fiscal health.
Yes—Romania remains a beautiful and culturally rich destination, with stunning castles, mountain retreats, and affordable cities like Bucharest and Cluj-Napoca.
The upcoming tax changes won’t drastically affect day-to-day travel for most tourists, but it’s worth factoring in a modest increase in local prices, particularly for services.
If you’re travelling soon:
Lock in accommodation and transport now to avoid potential price hikes.
Watch exchange rates—the Romanian leu has been volatile due to political uncertainty.
Be aware of possible protests or strikes, particularly in major cities.
Bottom line? Romania’s tax shake-up is a big move that could help stabilise its economy—but for travellers, it may mean slightly higher costs and some local unrest. That said, the country’s natural beauty, hospitality, and value for money still make it well worth the visit in 2025.
Sign up for the Daily Briefing
Get the latest news and updates straight to your inbox