Parliament has begun the first reading stage of proposed changes to income tax laws. In terms of a Cabinet proposal, taxes will vary according to income, the percentages being four, 20, 22 and 24 per cent for the highest incomes. The National Movement Simeon II (NMSII), a part of the ruling coalition, said that there should be only three tax brackets, of 20, 21 and 24 per cent taxes, Trud newspaper reported.
NMSII member Lydia Shouleva said that the NMSII would, before the second reading stage, propose a 21 per cent tax for the middle-income group. If the proposal is accepted, incomes between 180 and 600 leva will be taxed at the same rate. This would mean a flattening of income tax. This would mean a loss to the budget of130 000 leva, said Deputy Finance Minister Georgi Kadiev.
During the first reading, the entire right-wing opposition said it opposed a value added tax rate of 20 per cent. The opposition unanimously requested an additional decrease, to 18 per cent. The NMSII opposes a reduced VAT rate, Shouleva said. The reason is the high deficit on the current account.