The parliamentary budget committee accepted only the proposals of GERB and the Patriots to reduce VAT to 9 percent for the restaurant industry and for books.
The Ministry of Finance sent a sharp statement to the commission, in which they calculate what the losses from VAT reduction will be.
There are disagreements about VAT in the ruling coalition. The meeting of the budget committee passed without the presence of its chairman Menda Stoyanova and without the Minister of Finance Vladislav Goranov. Both are against the changes.
The Ministry of Finance calculated the losses and pointed out that in order to be compensated, it may be necessary to increase VAT or corporate tax.
Deputies decided to reduce VAT to 9% for restaurants and books. There will be vouchers for tourism for police officers and medics on the first line in state bases, in the version offered by GERB.
Ideas to reduce VAT have sparked political clashes in the budget committee.
Rumen Gechev – BSP: It became clear from the discussions that there is a great rift in GERB. Open opposition between the Prime Minister, the Minister of Finance, the group is divided, and someone will have to leave, because the Prime Minister is a very serious politician, he said that whoever does not agree with the 9 percent, to leave and will someone walks. Whether all together or just one minister, I do not know.
Evgenia Angelova – GERB – From GERB we were unanimous. – Is there tension in GERB, is there a disagreement to reduce VAT? – Let’s not comment.
One week ago, the prime minister said the finance minister had concerns, but he did not address them.
Boyko Borissov – Prime Minister: I have full confidence in him, but he is not my boss, I am his boss who does not agree, he leaves, resigns and goes on.
In an opinion to the deputies, the Ministry of Finance described the fears about the losses from the reduction of the DSS. For restaurants and books – a total of 163 million levs. The ideas of the MRF for lower VAT for goods for children up to 3 years old, and the BSP – for food and medicine paid by the fund were rejected. There will be no VAT reduction for tourist and fitness services.
According to Vladislav Goranov’s ministry, if all these ideas are approved, the losses will total more than 1 billion and 760 million levs, and it may be necessary to raise VAT to 24 percent and corporate tax to 17-18 percent. According to the MRF, the tax cut should have taken place after a long and deliberate debate.
Yordan Tsonev – MRF: In his place, I would be extremely critical, to make noise to the skies. It is the job of a finance minister to secure a tax office, not to provide businesses with tax rebates.
NFSB leader Valeri Simeonov was shocked that the legal commission had rejected his proposals.
Valeri Simeonov – Chairman of the NFSB: I will look for the position of the Prime Minister, because the position of the GERB party depends on him. I called, he didn’t pick me up, I’ll look for him again. We will have, I hope, a political council this week and I will raise the issue sharply, I will announce that there will be vouchers, this whole thing is being distorted in a version that does not work. Why are these councils and we unite around common decisions, here something is lame in the coalition.
The restaurant industry is pleased with the changes.
Richard Alibegov – Chairman of the Bulgarian Association of Restaurants: We propose raising the minimum wage for the industry from 610 to 800 levs at the time of entry of VAT. This difference will cover a large part of the estimated loss.
By reducing the VAT rate, greater collection will be achieved.
The changes enter the plenary on Friday.