INTEREST TAX OFFICIALLY STAYS IN HISTORY

The deputies officially abolished the tax on interest on citizens' deposits and reduced the so-called tax "weekend". The two changes were set out in a coalition agreement signed between the four governing parties. The bill itself was initiated by the deputies from "There is such a people".

The "interest" tax was introduced by the former Minister of Finance of GERB Simeon Djankov and came into force in 2013. In this period the interest rates were high, and in the conditions of recovery from the financial crisis additional revenues were sought for the budget.

In the first year of its introduction, revenues exceeded expectations of BGN 82 million. However, with the gradual reduction of interest rates, revenues melted and according to the reports of the National Revenue Agency in 2020 reached only BGN 5.6 million. The costs of administering the administrative burden for banks are close to the revenues, which further makes the existence of the tax meaningless.

However, for 2022 revenues from the tax in question of about BGN 2.8 million are expected, as according to the bill it will be abolished from April 1.

Weekend tax

The removal of the so-called Weekend tax was also enshrined in the coalition agreement. It was introduced in 2017 by the then Minister of Finance of GERB Vladislav Goranov. The tax cannot be abolished entirely due to European VAT legislation, although its revenue has been minimal in recent years. For this reason, the deputies proposed changes, which, according to business organizations, would not lead to relief.

The idea was to abolish the tax on in-kind expenses related to the personal use of company assets, but to make the expenses unrecognized for tax purposes. Thus, if a company is making an accounting profit, there will be no real relief, but if it is at a loss, it will win because it will not owe tax.

During a parliamentary committee, BIA commented that this would only penalize profitable companies. Thus, at the initiative of the chairman of the budget committee Lubomir Karimanski, the idea of these adjustments was deleted, and instead it was proposed to reduce the tax rate to a minimum - from 10 to 3%.

Lower tax for lawyers

The deputies discussed the proposal of "Vazrazhdane" for changes in the tax regime for freelance lawyers. It provided for the costs recognized for them to be increased from 25% to 40%, which in practice meant that they owed an effective income tax of 6%.