Finance Ministry: VAT reduction can lead to increase in taxes

The finance ministry has warned that taxes will have to be raised if the VAT rate on certain goods drops from 20% to 9%.

In a position submitted to the Bulgarian Parliament on May 20, the ministry warns that the corporate tax could jump to 17-18% or VAT for other goods and services could reach 24%.

Currently, the changes in the VAT rate are being discussed by the Budget Committee in Parliament.

The losses to the treasury from the reduction of VAT rates for all offered goods and services are estimated to be one billion and 800 million BGN, the statement signed personally by Finance Minister Vladislav Goranov reads. He has repeatedly said that he was against the differentiation of the VAT rate.

We must also emphasize that the estimates were made bases on possible reduction of the rate from 20% to 9%, because otherwise it would not be easy to defend in Brussels. The estimates are not only in case of a drop in the rate for restaurateurs and books, as requested by MPs from GERB and the United Patriots, but also for all demands of the opposition BSP, for example for children's goods, which is a request of MRF and drugs from the National Health Insurance Fund list.Fitness centres are also included, the statement says.

It is from the reduction of VAT on medicines that the largest losses to the budget would come from. It is about BGN 1,500,000,000 of the fiscal revenues. If VAT is dropped for restaurateurs, the losses to the treasury are calculated to be 150 million. This is a number that has already been announced, it reads.

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