Bulgaria’s government mulls introducing a tax on capital market transactions following the model of the EU financial transaction tax.

The measure is included in the governance program of center-right party Citizens for European Development of Bulgaria (GERB), right-wing formation the Reformist Bloc, nationalist coalition Patriotic Front, and the Alternative for Bulgarian Revival (ABV Movement), according to reports of Capital Daily.

The initiator of the proposal for the new tax is the ABV Movement.

The tax will not be levied on stock exchange transactions.

Deductions will be made from turnovers from securities transactions.

Market participants claim that the introduction of the new tax will have a negative impact on the capital market, which is in an unpleasant condition at present, while the revenues it will bring will not suffice to justify the damage suffered by businesses, similar to the case of the tax on interest earned from bank deposits.

According to experts, the tax will shrink investors’ profits and complicate the investment process.

“An evaluation of the impact of this tax on the business sector must be made in order to prevent a scenario under which its contribution to the budget is negligible, while businesses experience a detrimental blow,” said Lyubomir Boyadzhiev, Chair of the Bulgarian Association of Licensed Investment Intermediaries.

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