Bulgaria to Up VAT to 22% for 1 Year

Value Added Tax (VAT) will be increased to 22% for 1 year, according to the last draft of the cabinet's anti-crisis measures, the labor unions economic expert, Mika Zaikova, informed.

Zaikova reported the news Monday speaking for the Bulgarian National Radio (BNR), voicing her surprise from the move, which had never been discussed before.

The increase will bring an additional BGN 540 M to the State budget.

On Tuesday, the National Council for Three-Way Partnership will discuss the last version of the anti-crisis package. Zaikova further informs the measures are 39, of which 20 come from the proposals of the labor unions and the employers. These measures further include wage reductions if there aren't any layoffs.

Prices of electricity, heating and gas are not going up, the expert says, adding the cabinet wants to privatize the Sofia Heating Utility “Toplofikatsia” and the National Palace of Culture in the capital.

VAT was introduced in Bulgaria in 1994 at 22% and was reduced down to 20% 10 years later. Business experts have long insisted VAT is further lowered with another 2% in other to stimulate consumers.

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