ANIS: New Fiscal Measures Undermine Stability in a Strategic Sector and Create a Crisis of Confidence Among Investors

The expedited timeline for eliminating tax incentives for the IT industry, starting January 2025, sends a deeply negative signal toward a strategic sector of the Romanian economy, treated with disregard.

It is worth noting that the removal of tax incentives for the IT industry, as part of reforms under the National Recovery and Resilience Plan (NRRP), was initially planned for 2028. However, in November 2023, this incentive was abruptly curtailed with implementation within days, destabilizing the industry. Advancing this timeline yet again, through another sudden measure, jeopardizes the stability of one of Romania’s most dynamic economic sectors and fuels uncertainty for companies, gravely affecting strategic planning and investor confidence. According to ANIS research*, the elimination of the tax incentive will reduce the industry’s global competitiveness by increasing labor costs and further shrinking employment, which already saw a decrease of about 10,000 jobs in 2023.

ANIS warns that such measures risk isolating Romania on the global technology stage by discouraging investments and companies’ interest in the Romanian market, while undermining efforts to transform the economy into a competitive and digitalized one.

“Once again, the Government disregards fiscal predictability legislation and any dialogue with the business community and entrepreneurs who sustain the national economy, create jobs, and pay taxes. Removing this incentive in the current context could severely impact not only the industry, through massive job cuts, withdrawal of international companies, or redirecting investments to other countries, but also destabilize the broader economy at a critical moment for digitalization and retooling, which are essential to maintaining the competitiveness of Romanian companies,” said Edward Crețescu, President of ANIS.

The IT sector has played a vital role in the resilience of the national economy, even during crises. Over the past five years alone, the industry has contributed a trade surplus of over €20 billion. The sector directly accounts for about 8% of GDP and indirectly contributes more than 14% to GDP. Furthermore, its employment multiplier effect accounts for approximately 15% of the total workforce in the economy*.

Major fiscal changes that abruptly disrupt the dynamics of the industry risk undermining Romania’s economic progress and severely affecting the business environment.

We make a strong appeal to the Government to:

1. Return to the discussion table with the private sector, respecting commitments made in the Government Program for a genuine partnership with the business community, to identify balanced solutions for reducing the budget deficit.
2. Reconsider the decision to accelerate the removal of tax incentives for the IT industry and return to a predictable timeline, consistent with the current legal framework, allowing companies to adapt gradually to the new fiscal conditions.
3. Initiate a meaningful dialogue with the IT industry to identify solutions that support competitiveness and leverage the sector’s potential to contribute to Romania’s digitalization and overall economic growth.

*Based on the study “The Impact of the IT Sector on the Romanian Economy,” October 2024