Bulgaria PM Pledges to Retain 10% Flat Tax, 20% VAT Rate

Business | February 11, 2014, Tuesday // 11:34|  views

Bulgarian Prime Minister Plamen Oresharski attended Tuesday a forum titled "Restarting the Economy" organized at his initiative. Photo by BGNES

Bulgarian Prime Minister Plamen Oresharski has pledged that the government will retain the 10% flat tax rate and the universal 20% VAT rate.

Speaking Tuesday at a forum titled "Restarting the Economy" organized at his initiative, Oresharski was adamant that Bulgaria could not afford to abolish the low tax rates because it had to preserve and boost the competitiveness of the economy.

He declared that economic growth was exceptionally important and the government would be considered a failure unless it worked to support it.

Bulgaria's Prime Minister suggested that the government believed that the services sector could not provide sustainable growth and it would pursue re-industrialization and innovations.

He listed the spheres in which the socialist-led coalition government would seek to ensure continuity with its predecessors, including a stable macroeconomic environment, fiscal consolidation, preserving the currency board, a stable banking system, keeping the 10% flat tax rate for natural and legal persons and the unified 20% VAT rate.

Oresharski said that the government would also work to develop infrastructure so as to improve the investment climate.

He cited a number of new aspects of the economic policy, including a more active regulatory role of the state in the protection of competition and the fight against monopolies, which had gained power over the past years.

Bulgaria's Prime Minister pledged to reduce red tape and to introduce incentives for large-scale investment projects through simplified, fast-track procedures.

He said that Bulgaria would maintain moderate and decreasing budget deficits over the next few years and predicted that Bulgaria would be among the five EU countries with the lowest budget deficit in 2014.

Oresharski suggested that the government intended to reduce the deficit to a level below 1% of the GDP by 2016.

He pledged timely VAT refunds to businesses and announced that there would be new laws on public-private partnership and investments, concessions, public procurement and consumer protection.

Stressing the dire straits of the energy sector at the start of the term in office of the current government, he reiterated plans to fast-track the South Stream gas pipeline project under better financial terms and in compliance with Bulgarian and EU laws in the sphere.

He expressed hopes that the talks on the construction of unit 7 of the Kozloduy nuclear power plant would be successfully completed and Bulgaria would secure favorable implementation terms.

Oresharski pointed out that the government had managed to boost tax collection rates, to reconstruct the Bulgarian Development Bank to finance small businesses, and to accelerate EU funds absorption.

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Tags: Plamen Oresharski, Socialist-led government, VAT, flat tax, Unit 7, Kozloduy Nuclear Power Plant, Kozloduy NPP, South Stream gas pipeline, red tape, Competition Protection


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