Bulgaria's Socialist-backed government will keep value added tax (VAT) and corporate income tax unchanged, aiming to ensure that the country's economy stays competitive, prime minister Plamen Oresharski said on Tuesday.
Bulgaria has a 20% flat VAT rate, 10% corporate income tax and 10% personal income tax.
"In the conditions of strong competition, low direct tax rates are an advantage we cannot afford to give up, not in the foreseeable future at least," Oresharshi said at a meeting in Sofia between the government and representatives of major Bulgarian companies, as quoted in a government press release. "There are more downsides to differentiated VAT rates than upsides," he added.
The top items on the agenda of the cabinet are upgrading the country's infrastructure, adopting a more active role against monopolies, relaxing regulatory regimes for the business, and introducing an electronic government sooner than planned, the prime minister also said.
The Bulgarian News Agency quoted the prime minister as telling the forum that the government would keep away as much as possible from "pouring" public resources into troubled companies. Taxpayers' money is not going to be invested in the acquisition of production assets, the news agency quoted Oresharski as saying.
Bulgaria's economy ministry has announced plans to acquire insolvent fertiliser plant Chimco and indebted industrial machine repair company Remotex-Radnevo in an attempt to revive them. Chimco, which used to be Bulgaria's biggest urea producer with an output capacity of 800,000 tonnes annually, halted operations in 2003 and was declared bankrupt a year later. Remotex-Radnevo, one of the country's largest repair companies for heavy mining, transport and energy equipment, was privatised in 2002.