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The head of the budget committee, Menda Stoyanova, explained that changes in family taxes encouraged responsible parenting in Bulgaria. PHOTO: Velislav Nikolov
With the new relief, a family saved an average of BGN 37 per month.
Children only with income below BGN 500 per person, their amount remains the same
The tax refund for families with children will increase 20 times next year. For one child it will be possible to deduct BGN 4,500 from the annual tax base, for two children the amount becomes BGN 9,000 and for three, BGN 13,000. This means that there may be a tax credit of BGN 450 for one child and BGN 900 for two. This was voted on by the deputies of the Budget Committee with the approval of the second reading of the budget texts for 2021. Currently, the discount for one child is 200 BGN, for two, 400 BGN and 600 BGN, for three or more children.
In return, however, next year the amount of child benefits will not be increased and the income criteria for receiving them will be maintained, but their cap will be increased. Therefore, if one person in the family falls below BGN 500 next year, the allowance for one child remains BGN 40, for two the amount is BGN 90, for three, BGN 135, and for four children, 145 BGN, as for each subsequent family allowance increases by BGN 20. Initially, the government planned to have child allowances for all families. However, after that, the GERB deputies put forward a proposal to keep the income criterion, but to increase the amounts by BGN 10 per child.
Finally, the tax refund for families was raised. According to the chair of the budget committee, Menda Stoyanova, this would save an average of BGN 37 per month per family. And for low-income people, child support with allowances and tax allowances would amount to BGN 930 compared to BGN 600 in the previous version.
Earlier in the day, lawmakers finally approved changes to the tax laws. According to them, VAT is reduced to 9% for the supply of food for the home. The reduction of the indirect tax for the delivery of food will be valid until the end of 2021, until the price of food in restaurants is reduced, said Menda Stoyanova.
Parliament rejected the BSP’s proposal to reduce the tariff for medicines, despite arguments that in most countries it was lower than in other products. Nor was the BSP’s proposal to abolish the single tax accepted.
Food vouchers, which are recognized as employer expenses, amount to BGN 60-80 per month per employee. The deadline for annual tax returns and corporate tax payments is moved from March 31 to June 30.
The proposal was also voted on so that people can reduce their tax base by up to BGN 2,000 per year for home repairs and improvements, but only on the condition that they declare and have a document on how much they have paid to the owners.
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