The poverty problem cannot be solved by tax legislation rather than by changes in the structures of both the economy and employment, because a tax-free minimum at a low tax rate like this in Bulgaria will create incentives to hide labor and income. This is what the Deputy Chairman of the Bulgarian Industrial Association Dimitar Brankov announced during his interview at Darik Radio.

He believes that this is not the moment for a radical tax reform, as offered by CITUB, both because of the upcoming local elections and the forthcoming entry of Bulgaria into the so-called "waiting room" for the euro - ERM II Exchange Rate Mechanism.

The currently established tax system is bound by fiscal rules and currency board actions, and we have a separate structure for taxable persons that is specific to Bulgaria, Dimitar Brankov noted on the changes, proposed by the trade unions.

According to him, now is not the right time for a radical tax reform. "The upcoming municipal elections and the populism that has a tendency to diverge from the political spectrum are not the best environment for conducting such a conversation, especially given the commitment of the government and the BNB to initiate the entry procedure of Bulgaria in ERM II in July, "said Deputy Chairman of BIA.

The position that we have officially stated is that any radical changes in the tax system should be discussed after Bulgaria's entry into the euro area. This debate seems to have started a bit earlier than it should, Brankov added.

Asked about the renewed idea of ​​the so-called "wealth tax” for additional homes, properties, expensive cars and yachts, he commented that this proposal was also announced without any details. According to him, in this case we should also bear in mind the structure of the distribution of ownership, because here in Bulgaria - unlike in Germany, for example, a large percentage of Bulgarians have their own dwellings.

"I suspect that if a precise analysis and impact assessment is not made, this could ultimately punish the so-called middle class, and we must stimulate the development of the middle class, which is very low in the relative share; and such a "wealth" tax may be penalizing the savings and the accumulations of a state from the respective household, "Brankov explained.

Listen to Dimitar Brankov's comment on the other proposals of the anti-poverty unions in the frame of the conversation on the topic "Reactive".

Date: 12.07.2019

Source: Darik radio

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