As we expected: Tax hikes in municipalities

The newspaper "Sega" reports in its article that from 2017, a number of municipalities with financial difficulties will resort to raising taxes and fees. 36 municipalities are named, including Pernik, where the property acquisition tax is rising from 2% to 2.5%, Kardzhali with a plan to collect an additional 3.3 million leva from citizens by 2019. Similar actions are taking place in other places such as Lovech, Smolyan, Vidin, Batak, etc.

We read in "Sega":

The recovery plan of Dospat is indicative of the problems in smaller municipalities. With all the measures - both in the revenue and expenditure side, by 2019 the municipality has estimated that it will be able to collect only 1.7 million leva more against the background of much larger and already assumed expenditure obligations. The municipality intends to request an interest-free loan in the amount of 6.6 million leva, which it will not be able to repay, however. The hopes here are that 4.8 million leva of the loan will be forgiven by the government, which is a legal possibility when the financial situation improves.

We at EKIP have long warned about the danger coming from investment activity based almost entirely on European funds. In an article by Nikola Filipov on the implementation of the budget from February 2016, we already talked about the danger of new taxes in municipalities.

Rising levels   of indebtedness cannot but lead sooner or later to a jump in the tax level , so that the state can more easily cover its financial commitments. At the same time, the two main factors that generate foreign investments in Bulgaria are the low tax burden, as well as low labor costs. Unfortunately, in the last year there has been talk of increasing taxes in municipalities

 

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