Bulgaria Plans to Reintroduce 10% Bank Deposit Interest Tax

Bulgaria plans to increase tax on interest earned on bank deposits to 10% from next year, restoring the levy to its initial level, the head of budget committee in Parliament Menda Stoyanova has said.

In an interview with Trud daily Stoyanova said on Friday the current minority coalition government of cenytre-right GERB and right-wing Reformist Bloc would propose to Parliament to scrap the planned gradual reduction of the tax on interest on bank deposits and reintroduce it at 10%.

The 10% tax was introduced from the beginning of 2013 by the previous GERB government (2009-2013), incorporating earnings on interest into Bulgaria's flat tax policy. Former Finance Minister Simeon Djankov said back then that the government wished to ensure the equal tax treatment of income by introducing the new levy.

The Socialist-led government that took office in 2013 and resigned in July 2014 decided to phase out the tax in steps of two percentage points a year. The first cut, to 8%, took effect from the beginning of 2014.