Bulgaria's Finance Minister Vows to Resign if VAT Hike Materializes

Bulgaria's Finance Minister, Simeon Djankov, assuaged fears of increasing VAT by promising to resign if the tax goes up. Photo by BGNES

Bulgaria's Finance Minister, Simeon Djankov, offered Monday firm guarantees that taxes will not be raised by the end of the year.

The information was reported by the President of the Bulgarian Chamber of Commerce and Industry, Tsvetan Simeonov, during a break of the Monday meeting of Bulgaria’s Council for Tripartite Cooperation, which includes the cabinet, the Labor Unions and the employers.

Simeonov stated Djankov had been firm the cabinet is not going to “touch the corporate, income and Value Added (VAT) taxes and have said that if he fails to fulfill this promise he would resign.

The business will offer full support to the cabinet in their effort to realize in practice the anti-crisis measures, Simeonov declared.

The meeting is still going on Monday afternoon.

On Sunday, Prime Minister, Boyko Borisov, cited by the Bulgarian daily “Trud” (Labor), said he had assigned experts and cabinet members to look for ways to keep VAT at the current 20%, adding the final decision will be announced Wednesday.

The VAT increase has been a thorny issue in Bulgaria in the last few months with the cabinet changing their mind numerous times, and economic experts and political parties voicing strong disagreement with raising the tax. Several versions have been tossed around as well – anywhere from 22% to 25%.

Simeonov further informed that another serious measure discussed Monday is the cut of State administration expenditures by 20% by the end of 2010. The first employees in the public sector to be laid off are those who are probed by the Prosecutor's Office or have committed violations in the process of their work while the second wave of dismissals will involve employees with a poor work performance record.

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