On November 23, Parliament approved amendments to the Local Taxes and Fees Act that will allow municipal councils to set the minimum and maximum rates for local taxes from the beginning of 2008.

Parliament decided that the lowest local tax rate should not be lower than the rates applicable until the end of 2007, Bulgarian news agency BTA said.

Rates for local taxes cannot be adjusted during the year. If municipal councils fail to set the tax rates by deadline, current rates would continue to apply throughout the next year.

Several transitional periods have been set. Municipal councils will have to set local tax rates before February 29 2008. As a result, the due date for payment of local tax instalments will be moved by two months.

First and second property tax instalment will be payable between March 31 and June 30 2008, together with the first instalment for vehicle tax. A five per cent reduction will be given to those who pay the full sum of their taxes due in one lump sum.

As of 2008, the licence tax will be a local tax, set by the municipality and payable to the local budget.