The delay in reaching a political agreement to form a stable government willing to assume the economic and fiscal measures Romania urgently needs increases concern within the business community, generates societal tensions, and sends negative signals to investors, financial partners, and rating agencies.

In this context, on behalf of its over 600 member companies active across 32 sectors of the economy, AmCham Romania calls for alignment around the solutions the country urgently requires. The business community wants Romania’s interests and well-being to take precedence over political agendas, and for the solutions adopted not to exacerbate societal divisions. The stakes of the negotiations must go beyond electoral logic and personal egos.

From the business community's perspective, it is clear that Romania can no longer afford to postpone difficult decisions or delay the implementation of policies that address both immediate challenges and a coherent long-term economic vision. The European Commission expects a credible plan from Romania at the July 8 meeting of the  Economic and Financial Affairs Council (ECOFIN), and Fitch Ratings has already expressed concern ahead of its upcoming rating review on August 15.

Against the backdrop of significant risks threatening the economy, the only viable option is for Romania to preserve what has proven effective and avoid measures that could worsen the situation. Under no circumstances can Romania afford a downgrade to junk status, payment default, a freeze on EU funds, or a slowdown of the economy through counterproductive policies.

From this perspective, and to unlock the dialogue on fiscal and budgetary issues, AmCham Romania reaffirms its support for the flat tax as the most suitable solution to overcome the current challenge, along with the urgent restructuring of public expenditures. A significant reduction in public spending and a clear prioritization of budget allocations are the foundation for a sustainable recovery. There is no viable alternative without this step, in addition to implementing real and courageous measures to reduce tax evasion and the VAT gap.

The benefits the flat tax has generated for Romania’s economic growth are indisputable: the significant expansion of the middle class, increased labor market participation, reduction of undeclared work, and the acceleration of real economic convergence. The flat tax remains one of Romania’s few competitive advantages in the region in the race to retain and attract investment. It is a simple, transparent, and predictable system that is easy to administer both for the state and taxpayers.

AmCham Romania supports a generalized flat tax for all income categories, eliminating loopholes and exemptions to enable higher collection and allow a focus on genuine structural reforms. Social equity, a legitimate goal for public authorities, can be effectively ensured under a generalized flat tax system with the application of targeted deductions for vulnerable groups.

By contrast, the introduction of a progressive tax system amid fiscal and macroeconomic uncertainty would likely amplify imbalances. Countries that have adopted progressive taxation have done so only after lengthy transitions, serious technical preparation, and extensive taxpayer information campaigns. Romania is not yet in such a position.

In the current context, marked by the urgent need to correct an excessive budget deficit within a short timeframe, progressive taxation is not a viable solution. It will not lead to improved collection or address the root causes of the deficit — it merely diverts attention from the essential reforms.

The upcoming package of economic and fiscal measures must consider not only short-term revenue needs but also the longer-term trajectory of the economy. Without an attractive framework for investment and a performing private sector, potential tax increases will not yield more revenue but risk suffocating and contracting the economy.

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