The Bulgarian Hotel and Restaurant Association estimates that the moratorium on loan repayments introduced over the Covid-19 crisis should be extended for that sector of the economy by at least two years after the end of the pandemic, the deputy chairman of the association Atanas Dimitrov said.
Last month, the Bulgarian National Bank approved the request of the local bank association to extend the current loan repayment moratorium. The deadline for applying was extended to March 23, while lenders will have until March 31 to approve the applications.
The government's decision to cut value-added tax (VAT) rate for restaurants is beneficial in itself but it is not useful given that restaurants are staying closed to limit the spread of the coronavirus, Dimitrov said in an audio file published on the website of public radio BNR last week.
"We rely upon the extension of the VAT cut by at least two years or even it becoming permanent," Dimitrov added.
Bars, restaurants, gyms, shopping malls and casinos in Bulgaria will remain closed until the end of January under an order of health authorities. The suspension of their activities has been in force since December 22.
In June, Bulgaria's parliament cut the value added tax (VAT) rate for restaurant and catering services, books, baby foods and baby hygiene products to 9% from 20% as part of measures for alleviating the impact of the pandemic on the economy. The lower VAT rate will apply as of July 1, 2020 until December 31, 2021
About one-third of restaurant businesses in Bulgaria have gone bankrupt due to the coronavirus-related restrictions on their operations imposed by the government since the outbreak of the disease last spring, Dimitrov said without elaborating.