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Sat, Feb 11 2012
Bulgarian Prime Minister: VAT rate could go down in 2010
Photo: Надежда Чипева
Value-Added Tax (VAT) in Bulgaria could be reduced from its current 20 per cent rate by the end of 2010, Prime Minister Boiko Borissov told reporters during his visit to Israel on January 11 2010.
After meeting his Israeli counterpart Benjamin Netanyahu, Borissov said that Netanyahu had suggested to him to lower the 20 per cent VAT rate by the end of 2010.
Borissov had said previously that he planed to bring down VAT by two per cent in 2011. Now he said that the idea of lowering the rate by 0.5 per cent in 2010 was not a bad one because it would be good for foreign investors in Bulgaria and would help adjust the country's economy and finance to the change planned for 2011, Bulgarian news agency BTA quoted Borissov as saying.
Asked by Darik Radio if lowering VAT by 0.5 per cent in 2010 instead of two per cent in 2011 has been co-ordinated with Bulgarian Finance Minister Simeon Dyankov, Borissov said that hopefully Dyankov would allow the move. "If he doesn't we will persuade him to," Borissov said.
Since Borissov's Cabinet took office in July 2009, there has been constant talk of lowering the VAT rate, with enthusiastic backing from Borissov's party GERB's two right-wing allies in Parliament, the Union of Democratic Forces (UDF) and Democrats for Strong Bulgaria (DSB).
In October 2009, Dyankov said that VAT should be cut to 16 per cent by the end of the Government's four-year term while a month later Borissov said that the VAT rate would be cut to 17 per cent in 2011.
After meeting his Israeli counterpart Benjamin Netanyahu, Borissov said that Netanyahu had suggested to him to lower the 20 per cent VAT rate by the end of 2010.
Borissov had said previously that he planed to bring down VAT by two per cent in 2011. Now he said that the idea of lowering the rate by 0.5 per cent in 2010 was not a bad one because it would be good for foreign investors in Bulgaria and would help adjust the country's economy and finance to the change planned for 2011, Bulgarian news agency BTA quoted Borissov as saying.
Asked by Darik Radio if lowering VAT by 0.5 per cent in 2010 instead of two per cent in 2011 has been co-ordinated with Bulgarian Finance Minister Simeon Dyankov, Borissov said that hopefully Dyankov would allow the move. "If he doesn't we will persuade him to," Borissov said.
Since Borissov's Cabinet took office in July 2009, there has been constant talk of lowering the VAT rate, with enthusiastic backing from Borissov's party GERB's two right-wing allies in Parliament, the Union of Democratic Forces (UDF) and Democrats for Strong Bulgaria (DSB).
In October 2009, Dyankov said that VAT should be cut to 16 per cent by the end of the Government's four-year term while a month later Borissov said that the VAT rate would be cut to 17 per cent in 2011.
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Bulgaria fears decline in value-added tax revenue should crude oil prices stay at $70 a barrel and is considering increasing fuel and cigarette excise duties to offset the impact.
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I am Bulgarian (living abroad) and I am ashamed when I read about Boyko Borisov's ad hoc "plans" -- how can they even be called plans when his decisions change with every passing day and meeting with a foreign counterpart. Why would he listen to Israel's prime minister instead of looking at analysis made by his advisors and ministers? His statement, "If he doesn't we will persuade him to," reminds me of the Godfather's "I'll make him an offer he can't refuse".... scary! I am sad for this country going down this road of irrational and disorganized government.
Upon reflection, there was one request for a bribe to undertake a service.
It was from a foreign owned company.
Not an opinion, just the facts.
I with several friends made an investment to build a new company in Bulgaria in summer 2008 from scratch.
The relatively high VAT rate is an annoyance, but manageable with good planning. Slow repayment of outstanding VAT is more annoying as it ties up cash for extended periods. This is improving.
Result?
Invested: € 1.25 million
Jobs created: in 3 months, 180
Employees currently: 230
Employess paid in [...]
Read the full comment the top quartile of their field.
Direct exports of Bulgarian services over months: € 4.4 million
To date: Never a visit from any `Black hats`, no request for Bribes, no irregularities in Government interactions.
Overall result: Very happy Investors in Bulgaria, that will expand a further 100% jobs in the next 18 months.
Company has won several International awards for Sevice Excellence against world competition beating peer companies.
are you shore its only 0.5% and not
5.0% this is what it should be.
0.5% is nothing.
Seems impossible for any Bulgarian to make up his mind. Wouldn't it be better instead of lowering the VAT rate to do something about CORRUPTION to try get new foreign investors?