Fiscal policy for 2027 approved by Government

The Government approved today the fiscal policy for 2027, a document that will be submitted to Parliament for consideration. Finance Minister Victoria Belous presented the main proposed changes, which concern income tax, VAT, excise duties, tax administration and customs.

According to the minister, next year’s fiscal policy aims both to adjust the fiscal framework and to ensure additional budget revenues. The estimated positive budgetary impact of the entire package of measures amounts to approximately 5.1 billion lei.

For individuals, the Government proposes increasing the personal allowance from 29,700 to 40,020 lei annually. The same amount is proposed for the higher personal allowance, which currently stands at 34,620 lei.

At the same time, taxpayers could benefit from the tax facility for the sale of their primary residence even if they have not officially registered their domicile at the property, provided they can demonstrate that they actually lived there and that it was their only residence.

Another proposal provides for introducing a threshold of 100 lei for outstanding income tax liabilities. Thus, an arrears amount below this threshold will no longer prevent taxpayers from designating 2% of their income tax.


“The rates applicable to investment income will also be amended. The capital gains tax rate will remain at 12%, but it will be applied in full, without the 50% reduction on the excess amount. At the same time, the dividend tax is expected to increase from 6% to 8% for profits generated starting in 2027,” the finance minister said.


In addition, monetary donations made by business entities for the benefit of individuals will be taxed at the standard rate of 12%, compared with 6% at present.

The proposed measures also include introducing a 6% vice tax on participation in gambling and lotteries. The tax will apply to funds deposited to top up gaming accounts and to the price of lottery tickets, respectively.


“We are introducing a 6% vice tax on participation in gambling and lotteries, applied to funds deposited to top up gaming accounts and to the price of lottery tickets, respectively. This is a targeted measure intended, on the one hand, to discourage participation in gambling and, on the other hand, to ensure additional budget revenues,” Victoria Belous said.


Changes for companies

For legal entities and individuals engaged in entrepreneurial activities, the Government proposes extending by 2029 the income tax holiday known as the “zero rate” for undistributed profits.

At the same time, the eligibility threshold for companies would be increased from 100 million to 200 million lei.

The income tax rate applicable to peasant farms would be standardized at 12%, compared with 7% currently, in order to ensure tax treatment similar to that applied to individual enterprises and individuals in comparable situations.

For 2027, an 18% income tax rate is proposed for financial and insurance activities. In addition, the income threshold from business and management consulting above which a taxpayer may no longer apply the special tax regime of 4% of turnover would be reduced from 60% to 25%.

The Government also proposes eliminating the income tax exemption for private educational institutions, savings and loan associations, trade unions and employers’ associations. These entities will continue to apply the standard 12% rate.


“All these adjustments are aimed at ensuring equal tax treatment for taxpayers in comparable economic situations, as well as stimulating investment,” the finance minister said.


VAT: changes for food products, hospitality and energy

Regarding VAT, the draft provides for extending the reduced 8% rate to eggs and poultry meat, while maintaining this rate for bread, milk and certain fresh vegetables and fruits.

A 12% VAT rate is proposed for products from the livestock, crop production and horticulture sectors, as well as for certain fresh fruits. Currently, these products are subject to an 8% rate.

At the same time, the reduced VAT rate for the hospitality sector would increase from 8% to 12%, while a preferential regime compared with the standard rate would be maintained.

Starting April 1, 2027, the Government proposes applying a reduced 8% VAT rate to natural gas supplied up to a limit of 150 cubic meters for each tax period and each consumption point. The VAT exemption with the right to deduct will also be maintained for electricity, up to a limit of 100 kWh for each consumption point.

According to the minister, these measures are focused on the basic needs of household consumers and would enter into force after the end of the heating season in the spring of next year.

Another measure concerns distance sales of imported goods valued at up to 150 euros per parcel. A special VAT regime is proposed for these goods, along with a management fee of 12 lei per parcel, collected through postal service providers.

The Ministry of Finance estimates that the VAT-related changes will generate additional revenues of approximately 1.6 billion lei.

Higher excise duties on tobacco, fuel and other products

The 2027 fiscal policy also provides for a path of excise duty increases over the next three years.

Excise duties on tobacco products will increase by 20% in 2027 and by 15% in each of 2028 and 2029. For nicotine liquid cartridges, the increase will be 15% in 2027 and 10% in each of 2028 and 2029.

The Government also proposes introducing an excise duty on nicotine-free liquids intended for electronic cigarettes, in order to prevent the substitution of nicotine products with nicotine-free alternatives.

For cigarettes, a change to the reference price coefficient is proposed, from 1.47 to 1.57.

At the same time, the excise tax base will be extended to carbonated non-alcoholic beverages with added sugar or sweeteners and to energy drinks. An excise duty is also proposed for entertainment pyrotechnic articles.

Most excisable goods would be subject to a 10% increase starting in 2027. For diesel fuel, a sharper increase of 20% is предусмотрено.

For cars with internal combustion engines, excise duties would increase by 10%, while electric and plug-in hybrid vehicles would retain a preferential regime, with rates 25% lower.

The estimated impact of the excise duty changes is approximately 2.7 billion lei over the coming years.

New rules for tax and customs administration

The package of measures also provides for changes concerning the activity of the State Tax Service. These include clarifying the conditions for seizing taxpayers’ assets and introducing a gradual system for classifying tax violations according to their severity.

The automated recording of taxpayers’ bank and payment accounts is also proposed, as well as the possibility of automatically issuing collection orders.

Tax arrears of up to 20 lei for each economic classification would be automatically canceled at the end of each year.

In the customs field, the authorities propose establishing protection mechanisms for good-faith declarants in cases where a tariff classification consistently accepted for identical goods is subsequently changed.

It is also proposed to extend until March 1, 2028, the period during which road vehicles registered in Ukraine may remain under the temporary admission regime.

According to the Ministry of Finance, the estimated direct budgetary impact of the entire package of measures is approximately 5.1 billion lei. Of this amount, around 820 million lei would come from changes to the income tax applicable to individuals and legal entities, 1.6 billion lei from VAT, and 2.7 billion lei from excise duties.

Prime Minister Vasile Tofan said at the end of the Government meeting that the draft could be improved following parliamentary debates and encouraged civil society and the business community to submit proposals.


“And if there are things we can fix, we will fix them. I want to encourage everyone to bring forward these proposals during the parliamentary debates,” the prime minister said.


The document on the fiscal policy for 2027 will be submitted to Parliament for consideration.