Bulgaria PM Vows Speedy Payment of Overdue VAT Refunds

Bulgaria's Prime Minister, Boyko Borisov, says the delays in VAT refunds are due to the failures of the previous cabinet. Photo by BGNES

Bulgaria's Prime Minister, Boyko Borisov, declared Wednesday that his cabinet will attempt to fulfill all of his financial obligations to businesses by February 2010.

Borisov made the statement as a response to comments on the part of President, Georgi Parvanov, and Members of the Parliament from the Bulgarian Socialist Party (BSP) that his cabinet is purposely delaying payments for completed public orders to balance the 2009 State budget.

On Monday, Parvanov said the delayed payments account for about 1,5% of the Gross Domestic Product (GDP).

Borisov, on his part, replied Tuesday that the delays were due to the failures of the previous cabinet, scorning Parvanov for not addressing the real problem and reaffirming his government was doing everything possible to refund the due Value Added Tax (VAT).

During a meeting with the PM, local mayors were able to secure delayed payments from the Finance Ministry for European projects in the amount of EUR 240 M.

Borisov further promised Wednesday that in cases where the cabinet is unable to refund the money, it will issue official letters to aggressive banks to delay credit payments for business debtors, adding he had discussed the issue with Finance Minister, Simeon Djankov.

On Tuesday, the Finance Minister rejected the possibility of offering written guarantees - an idea first launched by Regional Minister, Rosen Plevneliev. Bank representative say in order for them to honor such guarantees the State must commit to clear and precise deadlines for refunding VAT to businesses.

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