Excise duties on beer and hard liquor will not be increased in 2010, Bulgaria's Parliament decided on November 25 2009. The decision is final after MPs approved the second reading pf amendments to the Excise Duty Act.

Increasing excise duties on alcohol became a much-debated issue in the past month, with twists and turns in the sage.
 
Finance Minister Simeon Dyankov started the debate by saying that he wanted excise duties to increase as of 2010 in order to secure an additional 60 million leva revenue for the Budget, which could be used for funding other activities, among them the treatment of cancer.

Strong public opposition to price increases prompted Prime Minister Boiko Borissov to axe Dyankov's proposal, but the plan surprisingly was resurrected by Parliament's committee on the budget on November 20 2009.

The budget committee's proposal was to increase the excise on spirits by 13.6 per cent to 1.25 leva a litre of pure alcohol, which would mean a 0.7 leva to 0.75 leva a bottle increase in the retail price of spirits, Bulgarian media said.

Many critics of the idea said that such a price hike would boost the grey economy, especially in the case of home-made liquor, mainly the traditional Bulgarian rakiya. Currently households are allowed to make up to 30 litres of rakiya a year without paying tax.

If the budget committee's proposal had been approved, the excise on home-made rakiya, which is set at half the rate of the regular duty, would have become 625 leva for 1000 litres.

It was the increase in the excise duty on home-made spirits, a sensitive subject in Bulgaria, where home-made wine and rakiya are centuries-old traditions, that provoked public discontent.

It made Borissov back down and say that because of this year's considerably high grape production, home-made rakiya production would be higher than the 30-litre tax free-quota.

On November 26 2009, Borissov said that he hoped that MPs would not go ahead with the planned excise duty hike.

To compensate for their decision, MPs decided to introduce a unified tax rate on gambling of 15 per cent as of next year.

Currently, gambling on sports is taxed at 10 per cent of revenue, while all the other games of chance, such as lottery, casino games and bingo, are levied 12 per cent tax.