Most parties in Parliament do not support the idea of reinstating 20% VAT for restaurateurs

The finance minister's idea to reinstate 20% VAT for restaurateurs and hoteliers, as well as the introduction of a financial incentive for people who report tax evasion, did not meet support from most parties in the National Assembly.

GERB, MRF and BSP said they would not support such changes. Finance minister Assen Vassilev explained that in many countries the submission of such signals is stimulated and the measure yields extremely good results.

Speaking to journalists yesterday, Finance Minister Assen Vassilev said that reinstating the 20% VAT rate for restaurant business was envisaged in a package of legislation, drawn up by the Finance Ministry. The package will be published for public consultation on Tuesday or Wednesday, he said.

GERB leader, Boyko Borisov reminded that the restaurant, hotel and fitness industry suffered the greatest damage from the Covid measures, so the VAT rate for them should remain 9%. GERB will not support the other proposal, according to which people who report tax evasion should receive 10% of the collected tax. Borissov said that such, in his words, cutting-edge proposals should be discussed with non-coalition partners.

"And now as a joke, with the return of the State Security (referring to State Security, which was the name of the Bulgarian secret service under the People's Republic of Bulgaria during the Cold War, until 1989) in Sofia, the bonus - denunciation system, goes as something absolutely real, because the State Security without denunciations cannot exist. Someone has to snitch, slander, blow the whistle, for which they get money, most likely. What are these bonuses- these were at the time of the collaborators of the State Security, when there were leading officers, they used to take 30 BGN for having an agent. When there was an agent to rat you out he got a bonus for that. It's a money launderette. Because, for instance, one can report 100 companies, picked out from the trade register, the authorities will find one of them with some offences and you go and get money. Such cutting-edge proposals should be discussed with non-coalition partners," Boyko Borissov said.

The MRF is firmly against the VAT increase for restaurateurs and hoteliers. They commented on the proposal for bonuses for people who report tax-evasions thus:

"We will not support it. For us it is a repression. It will lead to fictitious signals... There will be people who will make signal after signal in order to take 10 percent. This is ridiculous, it will not happen," said Delyan Peevski of MRF.

The BSP insist on keeping the 9 percent rate and reject financial incentives for whistleblowers.

"Disgusting, sorry for the word I use. Wrong, it is incentivized snitching, unspecified mechanism by which it will happen," said Kornelia Ninova - chairwoman of the BSP for Bulgaria group.

Assen Vassilev explained that incentives for people who report exist in many countries and give good results.

"Such legislation exists in almost all European countries, in the US, in England and is extremely effective. This is not something new that we have invented here and it works very well. The biggest tax frauds are usually detected by such signals from people who are in the system and see it being manipulated in an illegal way," said Assen Vassilev - Minister of Finance.

Vassilev said that they are negotiating with industry representatives. And proposals are being prepared to lighten the business so that the 9% rate can be maintained.

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