Government explains increase in taxes and duties

The Bucharest government has made a series of clarifications regarding the increase in property taxes and duties, that has sparked public discontent.

Leyla Cheamil, 12.01.2026, 14:00

The new year came with increases in property taxes, such as buildings, land and vehicles, which generated a negative reaction from the population towards these decisions of the Bucharest government. At national level, the increases are, on average, by 70%-80% higher than last year. However, following public discontent, the government has made a series of clarifications to justify these unpopular measures. Thus, according to the government, the collection rate has been previously low and taxes have not been adjusted with the inflation rate, which has generated significant revenue losses for local authorities. At the same time, the Government explains that Romania has been among the countries with the lowest share of property tax revenues in European countries – only 0.55% of GDP, compared to the 1.85% average of the European Union. Also, there have been major tax differences from one locality to another, and their value has not taken into account the market value of the building in the case of physical persons.

Over a third of taxes have not been collected, triggering significant loss in revenue collection, inequities between taxpayers, lack of performance in the administration and an increase in the amounts transferred from the national budget to local authorities, according to a Government statement.

In fact, the property tax reform has been assumed by Romania since the 2021-2022 period, through the National Recovery and Resilience Plan (PNRR) and in all negotiations with the European Commission to reduce the budget deficit, as well as through the Medium-Term Structural Fiscal Budget Plan. It is also provided for in the commitment assumed by the Romanian Government in December 2024, approved in January 2025 by the European Commission. In this context, one of the Government’s priorities for the beginning of the year is the reform of the administration, according to the decision of the governing coalition.

A 10% reduction in expenditure in the central and local public administration is also provided for. Each authority would decide whether the reduction will be made at the level of positions or personnel. In turn, the ministries and all central institutions must finalize the reduction scheme, because, as announced by the Liberal Prime Minister Ilie Bolojan, the Government intends to assume responsibility in Parliament for the reform of the administration this month, in an extraordinary session of Parliament.

The budget structure for this year also depends on the adoption of the public administration reform, which, according to the Prime Minister, must fall within a deficit of 6.4%, according to the commitments assumed. Figures from the Ministry of Finance for last year show a decrease of 32,000 by November in the number of positions filled in public institutions. (EE)