Bulgaria to Up Some Taxes to Boost 2011 Revenue

Business » FINANCE | September 7, 2010, Tuesday // 08:57| Views: | Comments: 0
Bulgaria: Bulgaria to Up Some Taxes to Boost 2011 Revenue The builiding of the Ministry of Finance in downtown Sofia. File photo.

The Bulgarian Ministry of Finance has published proposals for adjustments in the tax system in a bid to increase revenue for the 2011 state budget.

The proposals, posted at the Ministry's website, do not involve an overall increase in taxation rates, but introduces greater levy burdens for some cases.

Key proposed innovations include a unified VAT for the tourist sector, a new offshore tax, as well as increases in the rates for fuels and some tobacco products.

Some of the amendments to the tax legislation are motivated by the Ministry of Finance with the need to harmonize Bulgarian regulations with EU norms.

This includes the tourism VAT rate, which at present is 7% for organized groups and a regular 20% rate for self-organized tourists. The proposal is for a 14% unified rate for all tourist transactions, which will guarantee equality for all tourists.

The increase in fuel excise also follows an agreement with the EU. The proposal for regular gasoline is BGN 710 per 1000 l instead of the current BGN 685.

The excise for cigarettes will also be adjusted, with cigarettes up to 8 cm (filter excluded) taxed at the regular rate, cigarettes 8-11 cm taxed at a double rate, and products 11-14 cm at a triple rate.

A 10% tax will be levied at the source for offshore transactions to reduce tax evasion and money laundering.

A major innovation is proposed in the field of depreciation (amortization), which sees the speed of depreciation of assets decreased. This will increase the value of companies' assets and so the amounts taxable.

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Tags: taxes, Ministry of Finance, state budget, budget 2011, VAT, tourism, excise, offshore
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