Bulgarian Businesses to Pay 'Innovation Fee'

Businesses in Bulgaria, employing more that 10 people might soon be mandated to pay a certain amount in a fee aimed at boosting research and technology. File photo

All Bulgarian companies with over 10 employees might be asked soon to pay an innovation fee, according to the idea of the Economy Ministry to be included in the new National Innovation Fund (NIF) Bill.

The above companies on Bulgarian territory are estimated at 25 000, according to data from the National Statistics Institute (NSI). The Economy Ministry experts say they are still to decide if the fee, which is to finance NIF, would be based on revenue or profits, adding there will be tax deductions for business investing in research and technology.

The Bill, which is being prepared under the Hungarian model and should be ready in September, aims at encouraging innovations. The fees will be used to assist private innovation investments.

The Economy Ministry experts point out the fee is not a new tax because the funds would not be deposited in the State Treasury, but talks on the subject with colleagues from the Finance Ministry are still pending.

Economy and Energy Minister, Traicho Traikov, says the Fund already exists and has now BGN 5 M to assist innovations, but the Agency for Small and Medium Businesses, which is in charge of managing the Fund have told the Bulgarian daily “Dnevnik” that the Fund is not functioning since last year, money for 2010 has not been transferred, but even if it was, it would be used to pay for old projects.

Meanwhile leading representatives of the Bulgarian business are voicing support for the Ministry's desire to boost innovations, but most oppose the idea for the fee because they see it as a new form of taxation and fear the funds would not be used for innovations and rather be wasted.

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