Romania Leads EU in VAT Losses, Faces Critical Budget Deficit Amid Tax Collection Challenges

• Romania has the largest VAT gap in the EU, losing about one-third of VAT and corporate tax revenues, mainly due to tax evasion.
• The country has led the EU in VAT non-collection for the past decade, with similar issues seen in Slovakia, Poland, and Italy.
• Western and northern EU countries face revenue pressures mainly from tax base erosion and profit shifting, not domestic evasion.
• Romania’s fiscal crisis is driven by unpredictable legislation, unsustainable spending, and slow tax administration digitalization.
• PwC warns that repeated tax hikes without improving collection efficiency could harm businesses, investment, and economic growth.

Source: romania-insider.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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