site.btaEmployer Confederation Considers Suspending Dialogue with Trade Unions over Demands for Bigger Tax Burden on Businesses

In a position released Sunday, the Confederation of Industrialists and Employers in Bulgaria (KRIB) proposes to suspend dialogue with the Confederation of Independent Trade Unions in Bulgaria (CITUB) on a number of issues concerning social cooperation in the labour market and business environment in the country. The position was distributed to the media by the KRIB Management Board in view of recent proposals and, according to the employers' organization, arbitrary actions by CITUB aimed at drastically increasing the tax burden on Bulgarian businesses and especially the middle class. 

The KRIB Management Board recommends suspending meetings with CITUB on topics such as employee qualifications, discussions on the labour market, the business environment, tax and social security issues, and other issues that are not explicitly mentioned as part of the projects that KRIB and CITUB are implementing in cooperation – Social Partnership and Human Resources in the Double Transition" (KRIB project) and Sustainable Development through Social Partnership (CITUB project) under Operation Social Partnership, Human Resources Development Programme. 

The management of KRIB also recommends explaining the possible effects on employees' incomes and their opportunities to invest in Bulgaria if the proposals to increase the tax and social security burden are implemented. 

The statement also says that until "CITUB stops attacking the sustainable development of Bulgarian business and suppressing it in the interest of increasing public sector employment," the employers' organization will prioritize other unions as social partners for collective bargaining.

The KRIB claims that CITUB's behavior has become increasingly incomprehensible over the years, as instead of protecting the interests of workers, the union is focusing more and more on increasing taxes on both businesses and labour. 

"Today, CITUB behaves more like a radical political organization that has its own interest in taking income from workers employed on market principles and entrepreneurs, and redirecting it to the central budget and public sector employees, whose interests this union clearly wishes to oppose to all others. This is a direct action to sow division in Bulgarian society and destroys social dialogue and the market economy," the KRIB Management Board states in its position. 

Therefore, KRIB believes that dialogue with CITUB should be reduced and that employees of companies that are members of the employers' organization should be made aware that it is their interests that will be most severely affected by the radical proposals to increase taxes and social security contributions. 

"KRIB is a responsible social partner and, as such, wants to engage in normal dialogue with trade union organizations, but they too must behave like real trade unions, not like radical and uncontrollable political players sowing chaos and division," KRIB's management states at the end of its position.

Earlier in the week, CITUB President Plamen Dimitrov said on bTV that over the last 4 to 5 years, it has become increasingly clear to experts that the mantra "we are not touching taxes because they are very low and everyone is happy" is not working. Dimitrov argued that the tax conversation must take place and that the stigma that taxes will not change cannot remain. Especially over the last year and a half, it has become apparent that tax injustice is growing. This year, workers will pay BGN 2 billion more than businesses in corporate tax. This does not happen anywhere else in the EU. Businesses always pay more, according to the CITUB  President.

He explained that the Confederation proposes the introduction of new taxes that are already proving successful in other EU countries. These include a financial transaction tax, which is for the financial world, not for people and businesses, a tax on excess profits, and a digital tax, which is for digital companies. These are non-taxed sectors. According to calculations by CITUB, the digital tax and the financial transaction tax alone would generate an additional BGN 1 billion in revenue for the budget. 

Dimitrov also explained the need to increase contributions to the first pillar of the pension system.