Bulgarian Prime Minister Boiko Borissov has given a glimpse of some of the 48 measures that his Government proposes to fight the economic crisis, among them a "luxury tax" on yachts, cars with engine capacities exceeding 150 cu m, homes larger than 250 sq m and on interest on bank deposits of more than 100 000 leva.
 
There would be no change to the flat tax system nor to social insurance contributions, it was announced after a special Cabinet meeting and talks with employers’ organisations and trades union representatives.
 
Borissov announced only the measures to which employers and unions agreed, which Finance Minister Simeon Dyankov said added up to about 80 per cent of the proposals.
 
Estimates are that if accepted, the measures could bring between five and eight billion leva to the exchequer.
 
A rate for the luxury tax has not been agreed yet, according to Bulgarian-language media reports.
 
Other measures being put forward include the issue of a bond loan and a cap on the pay of public sector employees.
 
Further, it is proposed to privatise unwanted state property and to allow the Silver Fund, a mechanism set up some years ago to stabilise resources for pension funds, to invest in low-risk domestic financial instruments.
 
No tax will be imposed on pensions, only working pensioners will pay welfare contributions on their income. "Hands off pensions, the poor, mothers with children," Borissov said.
 
However, Borissov backtracked on the thorniest issue about whether civil servants should make their own social security contributions, saying that implementing all proposed measures would allow the Government to keep the status quo by the end of 2011, the point at which, official projections say, Bulgaria will emerge from the economic crisis.
 
Bozhidar Danev, head of the Bulgarian Industrial Association, has proposed that the Government levy a one-off tax of 10 per cent on property bought with undeclared income in the past two years, although it remains unclear how this proposal would work in practice, in regard to confirming the origin of income.
 
According to Dnevnik, the final version of the proposals, which will be subject to approval by the Cabinet, is to be drafted by March 24, when Borissov is scheduled to return from a visit to Kuwait and Qatar.
 
The Finance Ministry was skeptical about a proposal to scrap the ceiling on unemployment benefits, Dnevnik said.