A day after Bulgaria's prime minister promised that Value-Added Tax (VAT), which currently stands at 20%, could be cut to 17% in 2011, experts have called for sharper decreases.

“VAT levels could be cut not by three, but by five percent in 2011,” Georgi Stoev from the Bulgarian economic think-tank Industry Watch told Darik radio, adding that the move won't hurt the flow of revenues to the state budget.

According to him the government has randomly selected the proposed cut, because calculations show that the reduced rate can be 5%, decreasing the VAT to 15%. The EU law requires that the standard VAT rate must be at least 15% for supplies of goods and services.

Bulgaria has the lowest personal and corporate income tax in the EU at 10%, which was introduced at the beginning of 2008, replacing the previous system, which combined several different tax rates - between 20 and 24%, depending on income.

After coming into office, the new Bulgarian government announced it plans to keep unchanged the flat income tax rate and cut the Value-Added Tax (VAT) from the current 20% to 18% in 2010 and by a further 2% by the end of the term of office of Prime Minister Boyko Borissov’s administration.

We need your support so Novinite.com can keep delivering news and information about Bulgaria! Thank you!