Bulgaria Govt Defends Renewable Energy Tax before Constitutional Court
Bulgaria's Council of Ministers has defended the 20% tax on revenues of photovoltaic plants and wind farms against the claim of unconstitutionality.
The government adopted Wednesday a stance on the case referred to the Constitutional Court by President Rosen Plevneliev.
Plevneliev asked the Constitutional Court to declare the tax unconstitutional, insisting that it violated the provisions guaranteeing equal conditions for the development of business.
Bulgaria's head of state argued that the state had no services to offer in exchange for the new tax.
He also expressed fears that the new tax would be applied retroactively, levying a tax on producers whose contracts with the state had been signed years ago.
The 20% tax on revenues of wind and solar energy producers was introduced on 1 January, 2014. The new tax was met with sharp criticism by renewable energy producers, who staged numerous protests against it. The Bulgarian Photovoltaic Association (BPVA) defined the decision for the new tax as scandalous, opaque, discriminatory, and illegal.
The government, however, rejected the motives of the President as unfounded, according to reports of investor.bg.
The Cabinet assured that the introduction of the tax would not result in changes to the contracts which had already been signed.
The government argued that the tax would prevent further increases in renewable energy output and balance the production and consumption of this type of energy.
Bulgaria's Council of Ministers reminded that prices of renewable energy were not determined on the free market and that by choosing to participate in the regulated market the business entities had agreed to be subject to the regime applicable to the respective type of energy source.
The government underscored that the constitutional provisions on equal treatment did not entail the inadmissibility of a specific legal regime for certain types of activities.
"The state can impose a specific regime on a certain group of businesses and this is not unconstitutional, as long as all members of the group are treated equally," the Council of Ministers said in its Wednesday statement.
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