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Reducing VAT in restaurants, bars and books is a “misconceived measure”. It does not help consumers and employees, but the owners and the wealthy. Therefore, those who support the measure are the wealthy.
This was stated by former Finance Minister Simeon Djankov to bTV. He gave the example of Romania, where they also tried to reduce VAT, but for food, not for restaurants, and the price dropped only 1/4 or 1/5 of what is being reduced.
According to him, if the rate in our country is reduced by 11%, it will mean that the consumer, instead of spending 100 BGN, will give him 97 BGN, which will not affect the tourist service.
“The problem for tourism right now is that there is no transportation and there is uncertainty for people as to whether or not to go out,” added Djankov. And he explained that if only 1/4 or 1/5 goes to the end user, the interesting question is where the other money goes. They go to the wealthy, to the owners of large tourist establishments. This measure helps the rich and should be called “Measure to support the rich”, he is categorical.
On the argument that the VAT reduction will cheer up the business, Djankov commented that it makes no sense.,, ,, because a large part of the savings, if any, do not affect the price, but the benefit that corresponds to the owners.
So it is interesting if you notice who is talking about this measure, it is the owners, not the workers, not the consumers. These are the wealthy people who have most of this industry in Bulgaria, the former Finance Minister is categorical.
A few days ago, the VAT proposal generated controversy between Prime Minister Boyko Borissov and Finance Minister Vladislav Goranov. The Prime Minister demanded that the VAT rate be from 9% to 20% of the current rate.
Yesterday, the former economy minister, Nikolay Vassilev, said that, according to him, the prime minister was wrong in considering that this is a kind of anti-crisis measure for the entire industry. “Someone who changes the tax system on Tuesday morning without asking the finance minister is like you and me going to a pub and doing the bill without a bartender. In the country, tax policy is understood in the ministry of finance, but in macroeconomic policy They do not understand the affiliates of restaurateurs, right? They are wonderful specialists, good service, chefs, excellent restaurants in my hometown, Varna, but from macroeconomic policy, from insurance and fees tax, these people don’t understand, “Kate Oric said.
The former finance minister explained today that in 2010 he had a similar dispute with the prime minister over VAT cuts in some sectors. “Common sense” prevails, he added.
“Borissov convinced himself that it was a good idea. Then he was deterred. I think the same will happen, “said Djankov. The Minister of Finance is right, the analyzes are very defined. He added that there are enough other measures in other countries that help real business, not just wealthy people.
According to his economic forecast, GDP is expected to fall between 5 and 8 percent this year. He explained that the forecast would be more pessimistic, especially compared to what was planned last year.
We all have to prepare for a difficult year and a difficult start for the next. We have to be careful with the budget. Some of the measures that came into force, such as measure 60/40, according to the analyzes of other European countries, only work if it becomes 80/20 or 85/15. So it works, otherwise difficult, the former minister is categorical.
The economist added that the role of the state in supporting business could be further increased.
“There are 2 measures that help well in Europe. One is similar: 85/15 in France or 90/10 in Sweden and Hungary. From England, 27% of workers are in this measure, in France, 20%. Bulgaria is only 5%, “emphasized Djankov.
The former finance minister noted that grants also work in other countries. In Bulgaria, this is a little unfortunate, he said.
What economists see is a very difficult way out of this crisis, even without a second wave, if it comes it will be even more difficult, he added.
