The main organizations of the Romanian hospitality industry, FPIOR, HORA and FIHR, have sent an open letter to the Government and the Presidency, asking to maintain the 11% VAT rate for food and accommodation services. The request is crucial in a context where the sector is already facing an acute crisis, marked by a drop in traffic of up to 50% and an increase in insolvencies. HoReCa leaders warn that an increase in VAT to 21% could trigger a wave of bankruptcies, massive job losses and an erosion of the country’s tourism competitiveness, ultimately negatively affecting the very budget revenues that the measure is supposed to boost.
The representative federations and employers’ associations of the Romanian HoReCa industry, namely FPIOR, HORA and FIHR, have issued a strong warning to the Presidential Administration and the Government, labeling the current situation as a “code red for tourism”. In an open letter, the industry leaders categorically oppose a potential VAT rate increase from 11% to 21% on food and accommodation services, arguing that such a measure would have devastating consequences. They point out that the sector is already in decline, with recent data showing a reduction in restaurant and hotel traffic of up to 50% and a 9% increase in insolvencies in 2024, a trend that is expected to worsen in 2025.
In their view, the economic impact of the tax increase would be exactly the opposite of what the authorities expected. Instead of increasing budget revenues, the measure would lead to bankruptcies for thousands of businesses, the loss of tens of thousands of jobs and, implicitly, a shrinking tax base. Valentin Șoneriu, president of the FPIOR, compares the situation to the management of a company on the brink of a crisis, saying that the state is “cutting the engine that produces value” instead of stimulating consumption and optimizing the collection of existing taxes, which would be the real solution.
Another major argument is Romania’s dramatic loss of competitiveness as a tourist destination in the region. Neighboring countries such as Bulgaria and Hungary maintain low VAT rates in hospitality and implement active policies to support tourism, thus becoming much more attractive. Without a balanced fiscal framework, Romania risks being bypassed by both tourists and business travelers.
From the entrepreneurs’ perspective, the reality is already grim. Radu Savopol, president of HORA, describes a dramatic fall in consumption and an explosion in costs, warning that raising VAT would push fair businesses out of business and encourage the gray market to expand. Simona Constantinescu, president of FIHR, adds that tourism is a “calling card of the country” and operates in a fragile ecosystem that requires predictability and coherent policies for sustainable development, not an overload of taxes. The signatory organizations see maintaining the 11% rate as a balanced compromise and the only viable solution for the industry’s survival and growth, and are open to a constructive dialogue with the authorities.