Government Delayed Debt Payments Hit Bulgarian Business SectorFinance | December 1, 2009, Tuesday // 15:39| views
Vasil Velev, head of BICA, claims the Buulgarian government owes the business sector between BGN 1 - 2 billion. Photo by BGNES
The Bulgarian government owes the business sector between BGN 1 and 2 B, according to the data of the Bulgarian Industrial Capital Association (BICA).
The figure includes amounts due on public contracts, VAT and payments for European projects, Vasil Velev, BICA chairperson, has announced on Tuesday.
Another large business organization, the Confederation of Employers and Industrialists in Bulgaria, assesses the dues at BGN 1,5 B.
The Bulgarian government, however, maintains that the total debts are much smaller than these estimates.
At the end of October, companies in Bulgaria owed each other some BGN 220 B, data from the Bulgarian National Business Association show.
The amount includes companies' debts to banks, chairman Svetlozar Nikolov has explained. The bulk of the debts, however, are deferred payments or accounting dues. More than 90% of business debts in Bulgaria are paid on time.
The remaining BGN 10 B have an uncertain future, with between BGN 1 B and BGN 2 B expected from the state.
Velev added that the Government is putting in a concerted effort to balance the budget. This would not be a positive move if it were to be at the expense of bankruptcy of many of the companies, because of the loss to the overall economy.
The head of BICA concluded that delays in payment by the state had caused severe problems to the business sector.
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