Zero VAT on bread and flour remains in effect until the end of 2023

The temporary measure of 9% reduced VAT on books, newspapers, magazines, baby nappies and food becomes permanent. This is what the Parliament decided on December 15, adopting second-reading amendments to the Value Added Tax Act.

Following a proposal by the Bulgarian Socialist Party, the Parliament extended the zero VAT rate on bread and flour until December 31, 2023. The measure was due to expire on July 1 next year.

MPs also extended the reduced 9% VAT for restaurants and hotels next year, proposed by the GERB-UDF.

Restaurateurs insist that the 9% VAT should remain as a permanent measure.

The Ministry of Finance warned that this would lead to a deficit for the treasury of nearly 520 million BGN per year and that there was a risk that the exceptions with the reduced rates of 9% would become the norm and that the 20% VAT would become the exception, which may change the whole tax policy.

Zero VAT on bread, pensions increase and fuel reliefs among the Cabinet’s anti-inflationary measures