Financial and business news from Bulgaria

Ex-economy minister: VAT reduction is a good solution, but...

At the moment, we have nearly 200,000 unemployed, we have businesses hit hard. This is extremely bad for both the economy and the people. It was clear from the beginning that the coronavirus crisis would not pass us by.
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Now we will have to live with COVID-19 a few years, not to say decades.

This was commented on the air of bTV Asen Vassilev, former Minister of Economy, Energy and Tourism in the caretaker government of Marin Raykov.

"It is necessary to build a new infrastructure that will be adequate to the new reality, because COVID-19 was one stress throughout the system that showed weakness,” he added.

The former minister pointed out that he opposed the state to grant grants to firms in the form of grants.

"I am against gifts. Because when we start making gifts to companies, they specialize in receiving gifts and not working in the real business”, Vassilev believes.

"What are taxes, to put it simply? Taxes are the money we give to the state administration to buy goods and services to help us like new roads, hospitals, needs for the army, etc.

It is better for everyone to spend their own money and from this point of view it is also better to lower taxes. And here's one thing, but — if we cut taxes, we have to cut spending too.

This will lead in turn to less revenue in the budget. By reducing the VAT to 9% for restaurants, hotels and books, this would mean about BGN 250-300 million less in the treasury on a gozi-based basis,” the former minister explained.

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