Parliament Reduces VAT for Restaurants, Books from 20% to 9%

Sofia, May 22 (BTA) - On Friday Parliament discussed on first
reading six bills to amend the Value Added Tax (VAT) Act, all
related to a reduction of the tax for various goods and

The Budget and Finance Committee had approved only that of the
incumbent reduce VAT for restaurateur services and for books
from 20 to 9 per cent. GERB and the United Patriots proposed
that the reduced tax become valid from July 1 and continue until
 the end of 2021.

Holiday vouchers have also been planned to the tune of 210 leva,
 to be given to the front-line COVID-19 fighters, such as
doctors, medical specialists, regional health inspectorate
officials, emergency centres, the Interior Ministry and the
Ministry of Defence, among others.

Following a heated debate, the MPs approved only the bill tabled
 by GERB and the United Patriots with 107 votes in favour, one
against and 68 abstentions.

The remaining five bills were rejected. These included the bills
 tabled by the IMRO party, the Bulgarian Socialist Party (BSP),
the Movement for Rights and Freedoms (MRF) and Volya.

IMRO wanted a longer period of two years (until December 31,
2021) and a drop of VAT for restaurateur and catering services
to 5 per cent. BSP wanted a reduction of VAT to 9 per cent for
foods, medicines covered by the National Health Insurance Fund,
as well as medical items. MRF proposed reduced VAT for foods for
 children under 3 and pharmaceutical products for children,
including diapers. In turn, Volya insisted on 9 per cent VAT for
 all hard copy editions of books, textbooks and teaching aids.

On May 20, the Finance Ministry tabled a position at the
parliamentary Budget and Finance Committee against the proposal
for lowering the VAT rates for various goods and services. The
budget's losses due to the corresponding six bills' adoption
would amount to 1.8 billion leva, the Finance Ministry argued,
explaining that this would add to 16.57 of the total tax revenue
 and require increasing the common VAT rates to 24 per cent and
of corporate tax to 17-18 per cent in order to offset the
revenue losses.

During the debates BSP accused the incumbents of hasty measures
and called for a general tax and insurance reform. In turn, GERB
 and the United Patriots said the measure is intended to help
the worst hit sectors of the economy, and stressed they are only

Source: Sofia