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Sat, Feb 11 2012
Bulgaria's revenue agency completes U-turn on small-business social contributions
Photo: Julia Lazarova
Bulgaria's National Revenue Agency (NRA) amended on March 10 an earlier directive that sparked a public outcry of protest and fears that it would put thousands of small companies out of business.
The agency said on February 26 that small-business owners would have to begin paying mandatory social security contributions for all other work carried for the company, other than managing it.
The measure drew immediate criticism from analysts and small business owners. Martin Dimitrov, co-chair of the Blue Coalition, which backs the minority Government of Prime Minister Boiko Borissov but is not part of it, said in his blog that it was a "suicidal" decision that would hurt the private sector.
A Facebook group opposing the NRA measure gathered more than 9000 supporters and 15000 people signed an online petition against it.
The amendment to the directive said that social security contributions would only be owed if a salary is paid for the work. In most cases concerning micro-firms, their owners are registered as employees and pay social security contributions, but do not draw a separate management salary.
The agency said on February 26 that small-business owners would have to begin paying mandatory social security contributions for all other work carried for the company, other than managing it.
The measure drew immediate criticism from analysts and small business owners. Martin Dimitrov, co-chair of the Blue Coalition, which backs the minority Government of Prime Minister Boiko Borissov but is not part of it, said in his blog that it was a "suicidal" decision that would hurt the private sector.
A Facebook group opposing the NRA measure gathered more than 9000 supporters and 15000 people signed an online petition against it.
The amendment to the directive said that social security contributions would only be owed if a salary is paid for the work. In most cases concerning micro-firms, their owners are registered as employees and pay social security contributions, but do not draw a separate management salary.
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The problem is noone wants to pay for something that he/she will never receive.
Take social contributions for instance - why they are not called tax, since they have all characteristics of a tax?
Like SS and Medicate in the US.
So in summary, you pay 18.5% in Social security contributions, 8% in health installments, 10% flat rate tax, on top of that 20%VAT, and 1BGN in excise per every liter of gasoline cleverly calculated over all market prices in Bulgaria.
Total - you get about 60% of tax burden on one [...]
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