Israeli PM Benjamin Netanyahu has advised his Bulgaria counterpart Boyko Borisov to gradually reduce VAT as a measure to deal with the financial crisis.

Borisov, who is on a two day visit to Israel, stated that Netanyahu had suggested VAT reduction as a measure to reduce the affects of the financial crisis in Bulgaria.

“He (Netanyahu) said: the 10% tax you made is very good, but instead of waiting till 2011, it is a good idea to decrease VAT by 2%, reduce it 1/2% now and then again 1/2% in six months. On one hand it is good for foreign business, which will invest and it will also adjust the economy and finances of the country in the right direction,” Borisov said.

When asked whether Finance Minister Simeon Djankov would agree with the proposal Borisov concluded; “I hope he will agree. If he doesn’t, I will convince him to agree.”

Meanwhile, Netanyahu reportedly said that he envied Borisov for not having to work in a coalition and that it was good that the Bulgarian people had shown courage to part from parties that had ruled the country for 20 years.

Borisov added that a Bulgarian PM had not come to Israel for 18 years and continued that Israel is a strategic partner for the future and one that future generations will not forget

"We agreed with his financial and economic adviser to come to Bulgaria even in the next few weeks to help us with advice..... Netanyahu himself made a commitment and expressed a desire to lead an Israeli business trip to Sofia soon," Borisov concluded.