Bulgaria Finance Minister Resuscitates VAT Hike Idea

Finance | April 17, 2010, Saturday // 16:35|  views

The idea to increase VAT to 22% or 24% as an anti-crisis measure is not yet extinct in Bulgaria File Photo

Bulgaria’s Finance Ministry is due to present in the beginning of the week ideas about additional anti-crisis measures, Finance Minister, Simeon Djankov, informs.

Djankov, who is attending the informal meeting of EU finance ministers in the Spanish capital Madrid, spoke Saturday in a phone interview for Darik radio.

The Minister further hinted that one of those ideas could be the controversial increase of the Value Added Tax (VAT). The move was put on the table by the cabinet of the ruling Citizens for European Development of Bulgaria (GERB) party during negotiations with the labor unions and employers, but was rejected and did not become part of the 60 measures in the approved anti-crisis package. The package aims at bringing BGN 1.6 B for the budget.

Prime Minister, Boyko Borisov, already stated that if the measures do not lead to the expected result, he would still raise VAT “without asking anyone.” 22% and 24% were both discussed during the negotiations.

On Saturday, Djankov explained resuscitating the idea for VAT increase with recommendations from the EC he received during the Madrid meeting where he was told that surprises in the development of the European economy could not be ruled out and member states must undertake additional measures.

The Minister further said that in exception of Poland, the trends across the EU are similar to the ones in Bulgaria – low economic growth, low consumption and delay in collecting revenues.

On Friday, Bulgaria’s National Revenue Agency informed that the revenues collected in the first quarter of 2010 are BGN 800 M less than planned with the main shortages coming from VAT collection.

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Tags: Simeon Djankov, VAT increase, VAT hike, VAT draining, anti-crisis measure, anti-crisis package


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