Romania’s IT industry struggles amid tax, AI shifts
BUCHAREST, ROMANIA — Romania’s IT industry, a cornerstone of the national economy contributing over 8% of GDP in 2024, faces mounting challenges after the abrupt removal of long-standing tax incentives in January 2025.
These exemptions, which had fueled growth for over two decades, enabled companies to offer competitive salaries and expand operations. Their elimination has sparked widespread concerns, with many firms bracing for layoffs and financial instability.
The phasing out of these tax breaks began in 2023, with significant repercussions already evident. According to a survey by the Software Industry Employers’ Association (ANIS), 63.2% of IT companies reported negative financial outcomes in 2024, while 57.9% cited rising labor costs as a major issue.
The sudden tax policy changes announced in late December 2024 have only deepened uncertainty, with 81.6% of surveyed firms identifying potential tax hikes as their biggest concern.
“Nationally, we face tighter fiscal policies and the withdrawal of tax incentives. Unfortunately, the IT sector in Romania receives limited support from the government,” said Voicu Oprean, CEO of AROBS Transilvania Software.
“Tax policies have brought Romanian IT outsourcing costs to the same levels as those in Poland. Meanwhile, Moldova’s software industry is becoming increasingly attractive for global companies due to its lower costs,” he added.
AI and automation offer hope for growth
Despite fiscal pressures, Romania’s IT sector sees opportunities in emerging technologies like artificial intelligence (AI) and automation. Companies are focusing on cybersecurity, process automation, and embedded systems for industries such as aerospace and healthcare.
“Accelerating the adoption of AI and automation, which will create new business models and streamline processes, and the rising need for cybersecurity solutions as more activities move online are the key opportunities for 2025,” noted Florin Stefan, Application Development Director at Stefanini Group.
Generative AI (Gen AI) is particularly promising; a Deloitte study revealed that 67% of global organizations are ramping up investments in this area to enhance efficiency and innovation. However, most initiatives remain in pilot stages, highlighting the need for Romanian firms to catch up with global trends to remain competitive.
Industry leaders call for fiscal stability
To counteract the fallout from recent tax changes, industry leaders are urging the government to prioritize fiscal predictability and reduce labor taxes.
According to ANIS, 76.3% of companies view reducing the tax burden on labor as a top priority, while nearly half emphasize the importance of supporting research and development through grants and deductions.
“Romania urgently needs a public-private partnership in order to provide a stable and attractive business environment that is able to support this strategic sector,” said ANIS Executive Director Corina Vasile. While moderate revenue growth is expected in 2025, the sector’s future hinges on strategic investments in digital transformation and innovation-friendly policies.
As Oprean concluded, “Success depends on how well we anticipate and adapt to this fast-paced environment.” Romania’s ability to navigate these challenges will determine whether its IT industry can maintain its status as a key economic driver or lose ground to regional competitors like Moldova.
