Retail Chains Contributed BGN 1 B in VAT to Bulgaria's Budget

Business | April 23, 2014, Wednesday // 12:25| Views: 804 | Comments: 0
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Bulgaria: Retail Chains Contributed BGN 1 B in VAT to Bulgaria's Budget Photo: www.facebook.com/piccadillysupermarket

The entry of the modern retail chains in Bulgaria brought mostly benefits to the country's economy, shows a survey of the Institute for Market Economy (IME). 

Their presence in the country “legalized” the turnovers of the retail trade, and brought BGN 5 B to the economy in the period 2004 – 2013. In the same period those chains paid BGN 1 B in VAT. 

According to the analysis of the IME, around 72% of the goods, offered in the ten largest retail chains were produced in Bulgaria and certain product categories, such as chicken meat and dairy products are totally dominated by Bulgarian produce. 

Since 2007 the 10 largest FMCG chains in Bulgaria paid BGN 475 M taxes and insurance on their employees' salaries and another BGN 78 M corporate taxes. The cumulative effect of the direct and indirect taxes and of the “legalization” of the turnovers in the FMCG retail sector between 2007 and 2013 is estimated at around BGN 1.93 B. 

The ten largest chains employ more than 23 000 people and pay them salaries, which are by around 38% higher than the average in the sector. 

The IME quotes GfK data, according to which, in 2013 the hypermarkets, excluding discounters and cash&carry chains, held around 16% of the retail market in Bulgaria. At the same time the share of small independent stores decreased from 39% to 27% in the period between 2009 and 2013.

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Tags: retail chains, VAT, turnover, taxes, FMCG
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