THE National Movement Simeon II (NMSII), as part of its election promises, said on April 14 that it would introduce a near-to-flat tax rate if it wins the parliamentary elections to be held on June 25.
The NMSII will introduce only two rates for personal income taxation – nine and 19 per cent, it said. NMSII election headquarters chief and former economy minister Lydia Shuleva led a briefing for business people, also attended by Finance Minister Milen Velchev, Economy Minister Milko Kovachev and Deputy Prime Minister and Transport and Communications Minister Nikolai Vassilev.
The levels of taxable income will be reduced from five to three. The first will cover non-taxable minimum incomes, the second, low and middle incomes, which will be levied at a rate of nine per cent tax. The rate for the highest income group will be 19 per cent, while currently the rate is 26 per cent.
The new tax table is in fact an introduction of flat tax principles, said Shuleva.
The party programme also envisages a reduction in the social security burden from 29 to 26 per cent. This will be achieved by cutting the contribution percentage for the state pension fund. Meanwhile, more money will be redirected to private pension companies.
Child benefits will be tied to the length of service and amount of contributions paid until the baby is born. It is planned to pay women on maternity leave up to 100 per cent of their wages instead of the minimum wage as is the case now.
As to macroeconomic indices, the NMSII plans real economic growth of eight per cent, keeping the currency board arrangement in place until Bulgaria joins the EU, introducing the euro as the national currency in 2009, and annual inflation ranging between three and four per cent.