During a visit to Bulgaria, a mission of the International Monetary Fund (IMF) demanded changes to the 10 per cent profit taxation that parliament approved.

A decrease to the record 10 per cent came in the wrong moment, IMF mission chief for Bulgaria Robert Hagemann said as quoted by Novinar newspaper.

The planned salary increase of 10 per cent was also too high, taking into consideration the budget parameters for 2007, IMF representatives said. Bulgaria was expecting a budget surplus of 0.8 per cent in 2007, while the IMF recommended a surplus of at least two per cent of the GDP.

Decreasing corporate taxation was going to attract foreign investors and to stimulate local businesses, Bulgarian economists said.

New taxation percentages have already been approved and feature in the draft budget 2007, Novinar reported.

Bulgarian MPs from various parties said that the IMF demand was unsound, as the budget surplus Bulgaria was expecting enabled officials to decrease tax percentages.

The agreement IMF currently has with Bulgaria enables the fund to make recommendations only. It lacks the authority to enforce measures deemed appropriate, Novinar reported.