Stanislav Popdonchev, Vice President of BIA at Bloomberg TV
“We accept the proposal to introduce an excess profit tax as a warning, not only to the politicians who are about to consider the draft budget in the next National Assembly, but also to businesses. Apparently business has to foot the bill for the high social costs of the past two years.” This is how Stanislav Popdonchev, Vice President of the Bulgarian Industrial Association, commented on the "Business Start" program of Bloomberg TV Bulgaria with host Hristo Nikolov, the package of changes in the tax laws published for public discussion by the Ministry of Finance.
"We do not know how necessary it is to introduce such a tax in the light of what the executive director of the NRA shared this morning, that there is a significant increase in collection. We are talking about an overperformance of collection as of March 17 with BGN 752 million, which is an increase of 17% compared to the same period of last year and the best collection of tax revenues since 2015. At the same time, for VAT the growth is BGN 211 million and this is 9% and the best collection since 2018. This is with the "bad ", reduced VAT rates. He was also the only public figure who thanked the Bulgarian business for the correct attitude towards the tax authorities, because we have declared more than 10 billion additional tax base for taxation with corporate tax, which should mean another 1 billion additional revenues in the budget".
We hope that there will be no need for this proposed tax, said Popdonchev. According to him, the tax will affect all businesses because of the calculation formula. "It compares the taxable profit for 2022 to the average profit for the period from 2018 to 2021, increased by 20%. With 16.9% official inflation, up to 20% is three percentage points. That is, of every business that made more than 3% profit last year, 33% will be taken, i.e. a third of the top".
"The ministry aims to collect about BGN 2.2 billion from this tax, given that about BGN 4.6 billion is collected annually from corporate tax. That is, this is a 48% increase in the seizure of income from businesses. Almost every second enterprise that turns a profit will be subject to additional taxation".
