Romania’s Prime Minister Ilie Bolojan is considering a major rollback of fiscal pressure on large firms by revisiting the 1% minimum turnover tax (IMCA) imposed on companies with annual revenues above €50 million. This has sparked both optimism in the investment community and criticism from political rivals.
Why Bolojan Is Pushing to Reassess the Turnover Tax
Bolojan has argued that the turnover tax “inhibits investments,” a sentiment echoed repeatedly by both domestic and foreign investors. According to him, the levy distorts business decisions and undermines Romania’s appeal as an investment destination.
In a press briefing, he noted that a working group at the Ministry of Financevcomprising experts from across the political spectrum—is actively reviewing the future of the tax. He pledged that “at the latest by December,” the government will decide whether to reduce or abolish it.
What the Government Actually Did: From Cut to Controversy
Back in August 2025, Bolojan’s government eliminated the 1% minimum turnover tax for multinationals with over €50 million in annual turnover. The Finance Minister, Alexandru Nazare, defended the decision by pointing to a more focused tax model: rather than broadly taxing turnover, the new proposal aims to target sensitive expense categories — such as management fees, intra-group consulting, and intellectual property costs.
Still, the move was controversial. PSD, a major political party in Romania, strongly criticized the government’s decision, accusing it of favoring large multinational corporations at the expense of ordinary taxpayers.
At the same time, Romania’s business community has voiced concern over the current structure of the turnover tax. A collective statement from major business organizations emphasized that the IMCA “in its current form is a brake on investment.”
Broader Implications for Romania’s Fiscal Policy
This debate around the turnover tax comes at a politically sensitive time. Bolojan’s government has launched a broad austerity program to rein in spending, while also pressing for fiscal reforms to stabilize Romania’s budget position.
Critically, Bolojan has warned that raising other taxes is not a sustainable solution. He has stressed that reducing expenditures remains a priority.
From a longer-term perspective, Bolojan has voiced a broader philosophical concern: taxes based on turnover, rather than profit, can distort economic behavior, penalize investment-intensive companies, and undermine fiscal fairness.
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