The warning of an economist after the IMF has recommended taxes and taxes: “There will be economic and democratic consequences”

The International Monetary Fund (IMF) published a series of recommendations on Friday to reduce Romania's budget deficit. The measures propose taxes and taxes. An analyst Bogdan Glăvan warns that this is not the solution for the present situation.

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According to the fiscal framework, the fiscal deficit would have a gradual decrease to 3% or less in 2031, the International Monetary Fund (IMF) shows in the case of the recommendations submitted for Romania. The fiscal plan agreed with the European Commission stipulates that Romania will reach 3% in 2030. In 2024, the deficit has risen to 9.3%, that is above the plan with almost a percentage.

The Ministry of Finance explains in April that “The budget deficit of Romania calculated according to the national methodology “Cash” was, in 2024, of 8.65% of GDP, respectively 152.72 billion lei “.

“The ESA budget deficit, according to the official data of Eurostat, published on April 22, 2025, was 9.3% of GDP at the end of last year. The deficit calculation was made in the Accrual reporting system, defined in the European account system (ESA 2010), as well as in the regulations issued in the application of the Treaty of the European Union. Different estimation methodologies ”, shows the institution.

Now, the Romanian state reaffirms its commitment to fall into the deficit of 7% of GDP in 2025.

What the IMF proposes

The measures proposed by the IMF bring major changes, from the increase of VAT to the transition to the progressive tax system or even the change of the way the properties and micro -enterprises are taxed.

One of the most sensitive points is the renunciation of the unique tax rate, the subject that has been the subject of several contradictions in recent years between social-democrats and liberals, which support the maintenance of the unique quota. In the stipulated plan, it would be switched from to the single tax rate of 10% to a progressive system, with two odds, 15% and 25%. In this case, there could be compensation by reducing or even eliminating the contribution to health insurance. The institution also suggests that either pension contributions are no longer deductible or pensions are taxed.

The IMF also recommends the increase of the standard VAT rate from 19% to 20% in 2025 and to 21% in the coming years, as well as a gradual elimination of reduced quotas for certain products and services and an increase in alcohol alcohol or fossil fuels. Exceptions are the basic products.

In the case of taxation of the properties, the IMF proposes the unification of the tax on buildings and land and the reduction of exemptions, except for social cases. Also, for micro -enterprises, the fund recommends the drastic reduction of the turnover threshold from 500,000 euros to 88,500 euros.

Why proposals are not recommended by Romanian economists

Economist Bogdan Glăvan draws attention to the fact that the recommendations made by the IMF are not new and, above all, are not applicable to the current situation of Romania.

“The report refers exclusively to taxes. That is, it does not refer to other aspects of the economy of Romania, to public expenses. It refers exclusively to the settlement of taxes. This is a minus from the beginning, a minus of principle of this report. Because you cannot separate this analysis in many pieces or to focus only on taxes, without the tax. of society, economy and government.explains Bogdan Glăvan for “Adevărul”.

According to the economic analyst, the IMF report focuses on combating inequality in a generalIt is not discussed why the small level of tax revenues is in Romania is. (…) It's not a solution to our problem. At the solution we can only go when we understand the causes. From my point of view, in response to this question, the causes in small budgetary receipts in Romania are the disappearance of the tax base. On the one hand, they are no longer citizens to pay taxes. Many have left the country. This is obvious in all international comparisons. Romania is at the bottom of the world ranking of persons employed in relation to the population. We have a very small number in Romania in relation to the population. We have a small number of people who undertake something, that they are free professionals, that they are entrepreneurs, that they are saved, related to the population. And then, of course, a little money has been collected, because there are no citizens to pay taxes. “

“Another reason is the underground economy, which is important in Romania. It is more important than in other countries, than in developed countries. This is clear. And we all know. And here it has two components. It has the small evasion and the big evasion. On small amounts, and the evasion on large amounts. Do you encourage Romanians to stop evasion?explains Bogdan Glăvan.

“You cannot formulate policies without taking into account the preferences of the society”- Bogdan Glăvan, teacher of economy

The pursuit of the report would produce the expected effect only for a short period of time, so it would not solve the fund problems of Romania and would not lead to the fulfillment of the approved plan with the European Commission, to reach a deficit of 3% by 2030: “This IMF report, if followed, we will not solve the background causes of the state difficulties. Of course, any tax increase brings some money to the budget (…) For a period, one month, a week, six months, we will raise some money.”

The economist also emphasizes that such a scenario would produce consequences on several levels. “There will be consequences in economic and democratic level. Of the abrupt of any fiscal and economic policy in Romania. Because tax and economic policies must have a democratic support. And they don't have them at this time. I mean, what you are preparing now has no democratic support. That no one voted to be a progressive taxation or unprogative. The European Commission came and said you make the reform of the special pensions, make that reform. These came to meet the popular desire. They were kissing with the popular desire. (…) You cannot formulate policies to be applied without taking into account the preferences of the society ”, Bogdan Glăvan also shows.