Restaurants in Bulgaria to Go Dark for 9 Minutes in Fight for Lower VAT

Restaurant and hotel industry representatives in Bulgaria are escalating their protests against the planned increase in VAT for the sector, warning of rising prices, business closures, and a return to the gray economy. They argue that while European countries are reducing VAT rates to support the hospitality industry, Bulgaria is moving in the opposite direction, putting tourism at risk.

To express their opposition, restaurants and bars have started turning off their lights for nine minutes each evening at 9:00 p.m., a symbolic protest under the slogan "9 minutes of darkness for 9% VAT." The initiative, organized by the Bulgarian Hotel and Restaurant Association (BHRA), the Association of Restaurants in Bulgaria (ARB), and the Bulgarian Association of Restaurants (BAR), aims to pressure politicians into maintaining the lower VAT rate for the industry.

Industry leaders emphasize that a return to the standard 20% VAT rate will lead to price increases of 15-20% or more, affecting competitiveness and pushing businesses into financial distress. They argue that Bulgaria will become the only EU country with a strong reliance on seasonal tourism to impose such a high tax rate. Richard Alibegov, chairman of the Bulgarian Tourism Association, pointed out that countries like Germany have even lowered their VAT from 9% to 7%.

The hospitality sector is now demanding an urgent meeting with the ruling coalition and GERB leader Boyko Borissov. They warn that if their concerns are not addressed, they will escalate the protests nationwide and may seek support from other industries.

The VAT reduction for the sector was introduced as a temporary relief measure during the COVID-19 pandemic. Initially, the 9% rate was extended until December 31, 2024, but recent parliamentary decisions have not included further extensions. As of January 1, 2025, the government is proceeding with the full reinstatement of the 20% VAT rate, as stated in the Revenue and Expenditure Act.

Prime Minister Rosen Zhelyazkov confirmed in February that his administration would not introduce changes to the tax and social security burden, meaning the VAT increase will proceed as planned. According to the Ministry of Finance, eliminating the reduced VAT for restaurants, catering, and certain tourism services will generate an additional 371.5 million leva in state revenue in 2025.

Despite these projections, industry representatives insist that the move will have long-term negative effects on the sector and the economy. In response, they have vowed to continue their nightly blackouts until the 2025 budget is finalized and their demands are met.