Tax changes will not reduce the budget deficit to 3%, but they would make Bulgarian business uncompetitive and turn it to the gray sector. This was commented by Dobri Mitrev, President of the Bord of BIA, in an interview for Radio Plovdiv.
The occasion is the proposals for the return or increase of the VAT rate and the introduction of an excess profit tax as a measure to reduce the budget 2023 deficit from just over 6% to 3%.
According to him, an increase in the VAT rate is suitable only for exporters in Bulgaria, because of its recovery. For citizens, however, this would mean an increase in prices, and for businesses a return to the gray sector, which has significantly brightened thanks to the supporting measures.
"Employers' labor costs have also increased. It is most significant in the restaurant and sports and culture sectors - respectively, the average insurance income jumped by 36% and 27%, i.e. we have a positive result of the rate being reduced. There are no more tax frauds, VAT is paid and now we want to return them to the gray sector," commented Mitrev and added that it is unreasonable to mess with the tax model before our country enters the Eurozone.
According to him, the reserves that can be used to reduce the deficit are cutting costs for the administration, which has been in the same composition for years, and the population has decreased. In addition, not 50% of the dividend of state-owned companies, but 100%, should be paid into the budget.
"If we continue to make the state budget in this way, we are condemning every single Bulgarian citizen to even greater poverty. Increasing pensions and the minimum wage is populism provided we do it at the expense of high interest rate debt. This debt will not be able to be paid even by our generation. Our children will also have to pay for the mistakes that were made in the previous budgets," added Dobri Mitrev.
