site.btaParliamentary Budget Committee Decides to Keep Deposit Interest Tax at 8%

Parliamentary Budget Committee Decides to Keep Deposit Interest Tax at 8%

Sofia, December 2 (BTA) - The tax on income from interests will
keep its level of eight per cent, according to draft amendments
to the Value Added Tax Act adopted by the National Assembly
Budget and Finance Committee on second reading Tuesday.

The initial version of the Bill envisaged a ten per cent
increase of this tax but, eventually, the MPs adopted a proposal
of the Reformist Bloc (RB) to keep it at eight per cent.

"We are against any tax increase," RB's Martin Dimitrov said.
"There is no need to increase taxes, when we seek growth and
turning savings into investments," Dimitrov noted. The increase
of any tax gives a bad signal and, in the specific case, it
would have contributed minimum revenues to the budget.

Lyudmila Petkova, Director of the Tax Directorate with the
Finance Ministry, commented that the decision of the
parliamentary committee was unexpected but that the broadening
of the tax base was very important. She explained that the
hitherto effective provisions allowed exemption of certain
deposits from the tax in question and the banks would offer
namely such products to their clients.

Petkova pointed out that the decision of the parliamentary
committee generates a deficit of 17.5 million leva, which would
affect the 2015 budget. "The more concerning fact is that a 10
per cent interest is imposed on the income from interests of
foreign legal persons and they are in a position of
discriminatory treatment, said she. Petkova stated that the
reduction of the tax for foreign legal persons down to eight per
cent has not been commented but that, generally, the two taxes
should be equalized.