19.09.2015

"The Bulgarian municipalities do not have available enough instruments to pursue economic policy, to take decisions that make them more attractive or less attractive in terms of economic activity of the population and the businesses", Minister of Finance Vladislav Goranov stated in an interview for the Panorama programme of BNT. Thus he commented the idea municipalities to impose additional 2% rate on the flat tax. "The tax policy is not an end in itself", the Finance Minister clarified and added that the topic municipalities to have a basis for pursuing economic policy and for generating additional revenues was not new, but was part of the GERB election programme. According to him the debate at the moment is carried out with substituted arguments and therefore eventually no such decision would be taken. If the proposal was to be adopted the rate would again be proportionate, i.e. the tax would remain flat, Vladislav Goranov said and explained that when they were looking for broader support in the Bulgarian Parliament, that had been with the aim to preserve the VAT and flat tax rates.

"With the lower tax burden and in a state of deficit my only task is to try and protect society from further indebtedness. When we speak about budget expenditures, we hear different views what is important and how much should be spent. When we speak about the revenue side of the budget I hear how bad it is to pay taxes or how bad it is to harass economic activity by trying to collect something for the budget." Thus the Minister of Finance commented the idea the companies to declare which goods exceeding BGN 700 were used for personal needs and clarified that there were hundreds of thousands economic operators that were registered under the VAT Law. "The temptation for them to acquire assets with the right to tax credit, i.e. not to pay VAT on those and to use them for personal purposes, leads to a huge volume of the tax due to the budget not to reach the treasury", the Minister pointed out.

As to the planned increase of excise duty on cigarettes Vladislav Goranov stated that the main task of the Government was to avoid the situation of early 2010 when the honouring of our commitments to the EU and increasing the excise duty the pressure on tobacco products consumption directed great part of the consumption to contraband goods. He clarified that the only goal was "to make the increase of tobacco products affordable for lower income groups while those that can and are less sensitive to the price change to continue smoking whatever cigarettes they wish".