And Asen Vassilev’s tax laws stalled in the “evening of signs”

And Asen Vassilev’s tax laws stalled in the “evening of signs”
And Asen Vassilev’s tax laws stalled in the “evening of signs”

The complicated political situation due to the active trading of political decisions along the “Lukoil” case, which is going on between GERB/DPS and “PP-DB”, blocked the tax laws and indirectly – the adoption of next year’s budget.

After the PP-DB rejected the request of GERB and DPS for the speedy cancellation of Lukoil’s derogation, and the parties of Borisov and Peevski did not participate in the vote of no confidence, which led to the postponement of the final vote, the budget committee rejected it in first reading on Thursday in the evening the tax laws written by Asen Vasilev. This happened hours after Peevski stated that “this is the night of signs”.

It turned out to be a signal of the change of mood in the commission the unexpected assertiveness, with which the MP from “We continue the change” Venko Sabrutev declared for the return of the rate for the restaurant industry to 20% from January 1, 2024. A few weeks ago, after a sharp reaction from Borisov and Peevski, Asen Vassilev was inclined to keep the reduced rate, provided that the industry agreed to lightening measures. However, now Vassilev’s fellow party members have again returned to the firm position for a 20% rate.

The tax law package contains dozens of key propositions in various directions – from raising the profit tax for big business to taxing mushroom pickers and truffle collectors.

The vast majority of the debate in the room focused on changes in the VAT law. The head of the “Tax Policy” Directorate, Ludmila Petkova, explained that the Ministry of Finance is against the continuation of the tax rates reduced to 9% for restaurateurs, gyms and tour operator services. According to her, the budget loses only from the reduced VAT of establishments BGN 309 million annually. Petkova re-announced all the measures that part of the restaurant industry has proposed to clarify the sector – payment of wages only by bank transfer, mandatory installation of POS terminals, raising of the minimum insurance thresholds, use of only software licensed by the National Revenue Agency, possibility of non-payment of the account if a receipt is not issued (which also applies to other merchants), etc.

Asen Vasilev’s idea to introduce a bonus of 10% for every citizen or organization that submits data to the National Revenue Agency about a possible tax fraud worth more than BGN 100,000 generated controversial reactions. According to anti-corruption experts, the measure works well in countries like the US, for example, because it creates a financial incentive for whistleblowers to take the huge personal risks of notifying the authorities. In Bulgaria, last year, the NRA received 5000 alerts from citizens for tax violations of total value BGN 700,000, Lyudmila Petkova reported. The problem is that the amount will be paid to the whistleblower only if the tax revenue from the abuse is effectively collected, which is a serious restrictive condition for receiving the bonus.

A heavy dispute between accountants, business and the Ministry of Finance also caused the increase of profit tax for multinational companies to 15% effective rate. Lyudmila Petkova said that for Bulgaria the measure applies to 595 companies, of which 309 have a parent company in the EU, 5 – in Bulgaria and 280 – outside the EU. Only 5 countries in the EU have postponed the implementation of the European directive, and three of them have significantly higher taxation of large businesses compared to Bulgaria, Petkova explained.

Raising the the VAT registration threshold from BGN 100,000 to BGN 166,000, which will bring a solid loss to the budget, can happen from the fall of 2024 at the earliest, because it takes about 9 months for Bulgaria to get a derogation from the EU, Petkova further explained.

Both employers’ organizations and trade unions have spoken out against the idea of ​​the NRA receiving additional powers to define part of the civil contracts as employment for the purpose of paying insurance on them. However, the MoF wants to ensure that the payment of insurance contributions is not avoided through civil contracts. The measure to declare travel allowances is also problematic, accountants explained.

Many of the deputies are not inclined to support and the mechanism for raising tax assessments by municipalities every two years, which can lead to an increase in the building tax and garbage fee.

Although the budget committee rejected the bills in the first reading, they are yet to be submitted for consideration in the plenary hall. If they are rejected there as well, the cabinet will have to submit them to the National Assembly again, which will significantly delay the budget procedure.

The article is in bulgaria

Tags: Asen Vassilevs tax laws stalled evening signs


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