Romania plans to raise its VAT (value-added tax) by 5% to 24% in an effort to curb the country's deficit.
Prime minister said Emil Boc said the rise was an attempt to guarantee a loan of $US20 billion from the International Monetary Fund.
On Friday, the Constitutional Court ruled against plans to cut pensions by 15%, prompting the IMF to delay talks.
The court said the measure was unconstitutional. The BBC reports the ruling cannot be appealed.
Mr Boc said a meeting with the IMF to discuss an aid package for Romania would now be held on 30 June.
An austerity plan negotiated by the government with the IMF aims to cut the national deficit from 7.2% of output to 6.8%.
Finance Minister Sebastian Vladescu said the increase, which will be implemented in July, will generate between 3.5 to 4 billion lei ($US1-1.15 billion) in extra revenue in 2010.
The government also plans to cut public sector salaries by 25%.
According to KPMG, the average VAT rate in European countries is 20%. The highest rate is 25%.
