The Finance Ministry has proposed that a 25 % final tax is levied on bank transfers to offshore zones. `This measure will stem money-laundering, on the one hand, and prevent the expatriation of capital, on the other,` Deputy finance Minister Atanas Katsarchev said. Other proposed changes will broaden the taxation base and shift the taxation weight from direct to indirect taxes thus reducing direct taxes. A flat profit tax rate of 15 %for all companies has also been proposed. Proposals have been moved also for the VAT Act: The time allowed for the refunding of VAT will be reduced from 4 to 3 months; VAT on tourist packages sold aboard will be introduced with entitlement to 50 % tax credit for the tour agent. The excise duty on tobacco products will be upped and excise duties will be introduced for coffee and some types of liquid fuels. Katsarchev said these measures will reduce smuggling by 10-15 per cent. The real estate property taxation base will be altered. Transportation vehicles will be taxed on the basis of their market value and the amount of the road tax will become dependant on the weight of the vehicle. The local taxes will be updated and the dividend from non-tax budget revenues to which the state is entitled will be increased from 30 to 80 %.

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