Bulgarian Parliament gives go-ahead to new insurance tax

Bulgarian Parliament gives go-ahead to new insurance tax

The Bulgarian Parliament yesterday passed at first reading the bill proposing the introduction of a tax on insurance companies' premium income, media reported.

The bill, prepared by the Ministry of Finance (MoF), was discussed in Plenary Hall back in early summer but only made its wait on the voting agenda on Wednesday.

According to the new provision, a 2% tax will be imposed on insurers' premiums as part of a set of measures to kickstart the Bulgarian economy. Reinsurance and life insurance policies will be absolved from the new tax.

The amendment was initially due to come into force from September 1 but the launch was later postponed until January 1, 2011. It was pilloried by political parties Coalition for Bulgaria and the Blue Coalition, which sounded the alarm that it will prompt insurers to raise prices and pass on the burden to end consumers.

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