Banks in Bulgaria will automatically collect the tax on people's income on their bank deposits and submit it to the state budget once per month, the government has proposed.

The new 10% levy on people's income on their bank deposits is expected to come into force from next year.

Bulgarians will be obliged to include the income on bank deposits in their tax declarations a year later – in 2014 – after the taxation process is streamlined, the finance ministry has suggested.

Economists and the central bank have slammed the government's decision to introduce a 10% tax on bank deposit income, saying this would dent people's savings and shake the bank system foundations due to capital outflow.

The government said the new tax aims to raise BGN 120 M and force richer people to pay taxes on the income they earn from bank deposits.