POSITION OF THE MANAGEMENT BOARD OF BIA ON THE CHANGES IN THE SYSTEM OF TAXES, STATE AND LOCAL FEES

In connection with the forthcoming parliamentary elections and the resumption of the debate on changes in the principles and basic elements of taxation, the Management Board of BIA declares the following:

1. We do not support radical changes in the tax system, including the introduction of new taxes, without an in-depth impact assessment and a broad public and expert debate.

2. Changes in the tax system in the absence of reforms in public spending, transparency, control by the legislature, low efficiency and inexpediency of some public investments will not lead to the expected results, incl. to address inequalities caused by the EU's highest share of non-integrated and marginalized social communities, to massive local and foreign investment in new sectors, economic growth, quality jobs and innovation.

3. We reaffirm our opinion, expressed in the main guidelines for the activities of BIA at the 15th General Assembly, incl. to improve tax legislation, comply with the provisions of European directives and the case law of the European Court of Justice and the Court of Citizens' Rights. Our country occupies one of the last places in the EU in terms of fiscal decentralization, as a small part of the municipalities have a satisfactory level of financial independence. In this regard, it is necessary to change the distribution between the revenues of the municipalities and the central government, radically restructure the administrative-territorial division of the country and reduce the number of municipalities, in accordance with the new demographic and economic realities.

4. A framework should be prepared and reforms should be undertaken in the medium term in the system of state with local fees and their linking with the economically necessary costs of providing the relevant public services.

5. In the current context of the COVID-19 crisis, the need for predictability of the basic parameters of the investment environment is growing.

In order to support the business in the conditions of the deepening economic crisis, as a result of the pandemic of COVID-19, the Management Board of BIA offers the following tax reliefs and preferences for the business for the period 2021-2022:

• Enterprises to be exempt from profit tax. We remind you that the income from corporate tax in the last two years amounts to BGN 2.3-2.6 billion. These funds can be directly used to effective and direct support of the Bulgarian business.
• Individuals to be exempt from paying dividend tax in the amount of 5%.
• Observance of the constitutional principle in determining the administrative fees in relation to the expenses for them.
• Provision of tax incentives for companies that invest in high and innovative technologies.

The Management Board of BIA calls on the political forces, the social partners and the expert community for balance, responsibility and competence in participating in the debate on changes in the tax system of the Republic of Bulgaria.