Bulgarian grain producers have accused the government of failing to fulfill its promises.

The governing body of the National Association of Grain Producers issued a statement Monday saying that the draft Tax and Social Insurance Procedure Code did not reflect a part of the agreements reached between the Association, Agriculture Minister Dimitar Grekov, and Deputy Finance Minister Lyudmila Petkova on October 1.

According to the media statement, as cited by the Bulgarian Telegraph Agency, the objections concern the introduction of a VAT reverse charging mechanism on deliveries of grain and industrial plants as of January 2014 for a period of up to 2 years, as well as the partial introduction of a special for the strict observance of VAT recovery deadlines.

According to the Chair of the Association, Angel Vukodinov, the government failed to apply the parameters agreed during the two consecutive meetings with them, thereby violating the principle of integrity in politics.

The Association argues that delayed VAT recovery, which usually takes more than the 30-day deadline, hits small and medium-sized agricultural producers worst.

The Association explains that delayed VAT recovery results in losses of working capital, which necessitates taking loans from banks, and eventually makes the output more expensive.

At the same time, large-scale producers, in a bid to avoid VAT recovery procedures, may start making intra-Community supplies of the necessary raw materials from EU member states for which they did not owe VAT, which, however, is unaffordable for small producers, according to the Association.

The Association also warns that they have been burdened with unrecovered VAT of BGN 1 M for the credit period.

Grain producers say that the meetings with representatives of the Agriculture Ministry and the Finance Ministry are still underway, adding that the outcome of the talks will determine the next steps of the Association.

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