site.btaParliament Rejects Bills Introducing Progressive Income Tax in Place of Flat Rate

Parliament Rejects Bills Introducing Progressive
Income Tax in Place of
Flat Rate


Sofia, November 19 (BTA) - Parliament rejected two bills
amending the Income Taxes on Natural Persons Act on first
reading on Wednesday. The two bills, introduced by Ataka and the
Bulgarian Socialist Party (BSP) - Left Bulgaria, proposed that
the 10 per cent flat income tax rate be replaced by a
progressive tax rate.

Ataka's bill was rejected by a vote of 41-110, with four
abstentions. The bill of BSP - Left Bulgaria was rejected by a
vote of 62-112, with one abstention. The proposed amendments
were backed by BSP - Left Bulgaria, the Patriotic Front, the
Bulgarian Democratic Centre, Ataka and ABV. GERB, the Reformist
Bloc and the Movement for Rights and Freedoms (MRF) voted
against the amendments.

Yordan Tsonev (MRF) said that without the MRF's votes the flat
tax rate would have been scrapped. "If the MRF had acted on its
opposition reflex and the demand that it should by no means back
[the government coalition], the first reform would have become
a fact and it would not have fit in with the stated intentions
of the Reformist Bloc and GERB," he said. "Without the MRF there
cannot be a values-based majority in this parliament," said
Tsonev.

During the debate, BSP - Left Bulgaria leader Mihail Mikov said
that taxation is part of the citizens' perception of injustice.
While arguments such as "you introduced it" may be justified, it
should be noted that the 10 per cent income tax was introduced
when the economy was growing. Bulgaria is the EU's poorest
country and has the largest proportion of working poor. Boosting
consumption is a must for economic development. Mikov argued
that progressive taxation was an economic necessity for
Bulgaria's development.

Martin Dimitrov (Reformist Bloc) called the proposals "populist"
because the BSP could have introduced progressive taxation
during its previous term in office, but proposed it only now
when it was in opposition. The flat income tax revenues have
exceeded the projection. This is the only tax which brings
growing revenues even during a crisis. The flat tax rate is an
incentive for voluntary compliance, said Dimitrov.

Atanas Tashkov (GERB) said the two bills would have a negative
impact because one of the most effective measures against tax
evasion is to avoid having different tax rates. PK/DD


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