The Gray Economy Sector in Bulgaria is Shrinking, AIC Survey

The gray economy sector in Bulgaria is shrinking. This was reported by the Association of Industrial Capital on 12^th of June. The main reasons for improving the environment are better tax collection, higher exports and lack of political tension. Still, almost a third of the business continues to work in the gray sector.

The share of the gray economy sector in the country for 2016 is 28%, compared to 2010 when it was 36%. In Europe, it is 15% on average.

Vasil Velev - Chairman of the Industrial Capital Association: This problem includes unfair competition, not paying social security contributions, taxes and hiding income, drawing competitive advantages from their guilty behaviour, thus reducing the cost of goods and services sold.

Gray sector may be decreasing, but people often suffer from unfair employers. Stefan Petranov, Creator of “Economy in the Light” Index: “There are too many people who work and receive remunerations, which are different from what is written in the official contracts and this weakness continues”.

The business damands that cash payments be limited as a measure against the gray sector.

There is already a draft of a law prepared by the Ministry of Finance, according to which as of 1^st of August, cash payments are envisaged to be up to BGN 5,000, and as of 1^st of January 2019 - up to BGN 1,000 levs. The draft is subject to review by Parliament.