Survey: Fiscal instability puts brakes on IT sector, industry feels effects of tax decisions, anticipating difficult 2025

More than 80% of companies in the IT sector, members of the Employers' Association of the Software and Services Industry (ANIS), believe that the tax measures adopted in 2023 have had a negative or strongly negative impact on their financial results, and that the changes announced at the end of December 2024, to be implemented from January 1, 2025, have generated additional uncertainty, according to the results of the ANIS Sentiment Survey 2024, the annual barometer on the state and prospects of the IT industry in Romania."The survey, carried out in December 2024/January 2025 among members of the Employers' Association of the Software and Services Industry, shows a combination of frustration, uncertainty and moderate optimism for 2025. The IT industry in Romania continues to face challenges generated by the fiscal measures adopted at the end of 2023 and exacerbated by tempestuous tax decisions at the end of 2024. Although companies are anticipating moderate growth opportunities, fiscal unpredictability is strongly influencing plans for 2025," reads a press release by ANIS sent on Wednesday.According to the cited source, the decision to partially eliminate the tax breaks in 2023 has generated significant effects on IT companies. Thus, 63.2% reported a negative impact of the partial elimination of the facility on their financial performance in 2024, while 57.9% pointed to increased labor costs as a major negative factor; 34.2% of companies managed to grow their team in 2024, down from initial estimates of over 64%, and 21.1% of companies ended 2024 with declining revenues, down from just 10% who anticipated such a situation at the beginning of the year.Despite the challenges, companies have continued to explore opportunities by diversifying portfolios and expanding into foreign markets, as reported by 65.8% of respondents.The tax decisions made at the end of December 2024, to be implemented as of January 1, 2025, have surprised the industry and amplified the feeling of uncertainty, the barometer reveals. In this regard, 81.6% of respondents consider potential tax increases as the biggest threat to their business, followed by lack of tax predictability (71.1%).In addition, the complete elimination of tax breaks, initially scheduled for 2028, is perceived as a decision that will affect Romania's global competitiveness in the IT sector.For 2025, IT companies anticipate a moderate turnover growth and a stabilization of teams in 2025, but remain concerned about the unpredictability of the business environment. Specifically, 44.7% of respondents expect revenue growth in 2025 and 47.4% expect stagnation. In addition, only 36.8% of companies expect to expand their team, while the majority (52.6%) believe that the number of employees will remain constant.At the same time, companies emphasize the need for an attractive tax environment and coherent public policies to support the competitiveness of the IT sector.ANIS members see a number of measures as essential to counter the negative effects of tax changes. Thus, 47.4% of them consider that tax predictability is an imperative for strategic planning and investment, while reducing the tax burden on labor is considered an absolute priority by 76.3% of companies. Supporting research-development-innovation (R&D) through grants and tax deductions is mentioned by almost 50% of respondents."The survey data confirms the concerns of IT industry companies, in particular with regard to tax and legislative instability. The impact of taxation on costs, employee motivation and global competitiveness is obvious. Romania urgently needs a real public-private partnership in order to provide a stable and attractive business environment capable of supporting this strategic sector," said Corina Vasile, executive director of ANIS, as quoted in the press release.The IT industry in Romania remains an essential driver of the economy, but its future success depends on coherent public policies and support for innovation, say ANIS members.The Employers' Association of the Software and Services Industry (ANIS) is the representative association of the IT industry in Romania.ANIS has more than 150 member companies, is a promoter of digitalization and has been representing the interests of the IT industry for 25 years, being a credible dialogue partner that can contribute to the creation of public policies that facilitate the use of technology for socio-economic development. (Photo:https://www.facebook.com/anis.romania/?locale=ro_RO)