Bulgaria: Tax System

According to EU experts, the Bulgarian tax system is relatively good and does not need serious reforms, but the tax collection and the control and reduction of tax frauds should be improved. With regard to VAT the experts recommend to keep a broad base in order to avoid losses for the state budget. Bulgaria is placed 4th in the EU with regard to the share of the money collected from VAT. The collection rate is 70% at present, whereas the average one in the EU amounts to 50%.
Regarding a possible revision of the 10% flat rate on incomes, the experts claim that this is within the priorities of every single country. However, taxes on higher income classes in other EU states are 19% higher than on lower income classes. Some Bulgarian analysts believe that the low tax rate contributed to higher transparency in the national economy and helped attract more investments. while others claim that the progressive tax rate will lift the burden from the poorest people.
The survey conducted by the European Commission shows that the share of the grey economy reaches in Bulgaria nearly 32%, whereas the EU average amounts to 15%. The European experts recommend that Bulgaria should take measures to collect more taxes by monitoring the revenues as well as the expenditures of the tax payers. Electronic payment is another way of reducing the share of grey economy.


Do you want an expert advise by Alessandro Pasut about the Bulgarian Tax System? Click here!


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