MEMBERS of the National Council on Tax Policy (NCTP) and Deputy Finance Minister Stamen Tassev have agreed to discuss the Council's suggested amendments to tax legislation, the Finance Ministry has announced.

Tasev is responsible for the tax policy of the Government. The NCTP consists of representatives of trade unions, employers and industries' organisations.

There has been harsh reaction to the Government not keeping to its promises regarding tax changes.

After refusing to decrease the corporate tax from 23.5 per cent to 20 per cent and setting it at 22 per cent, the Finance Ministry has also refused to change also the rules for taxation of natural persons. It also will not fullfil an election campaign promise by the governing party to reduce profit tax to zero per cent when the profit is re-invested.

In May, Finance Minister Milen Velchev's team an-nounced that the income under which no tax will be calculated would be 120 leva a month for the following year and the lowest tax for people with low income would be 12 per cent. But the new amendments to the tax legislation envisage a tax minimum of 110 leva and a lowest tax of 15 per cent. Calculations done by the Finance Ministry showed that decreasing the tax on the lowest income bracket, and raising the tax minimum by 10 leva, would mean losses of 70 million leva, the Ministry said.

The other arguments for not reducing the tax burden was that given a projected seven per cent rise in incomes, the tax burden will increase, which contradicts the Government's programme for reduction in taxes and improvement of the business environment.

"The IMF supported the reduction of the corporate tax to 20 per cent. It has always been the Government's intention to lower tax rates and we've supported that and we still do," said Gerald Shiff, IMF's country director for Bulgaria in an interview with Pari daily.

At the end of last week,Velchev said that the introduction of family taxation was possible after 2005, when the National Revenue Agency has to start operating. Accor-ding to him, however, the limit of the annual turnover of entrepreneurs subject to patent taxation will be reduced from 75 000 to 50 000 leva.

Excise duties on petrol will increase by 12.5 per cent, which is expected to push the price up by about five stotinki a litre. Excise on cigarette doubles to 0.4 stotinki a piece plus 43.5 per cent of the price.