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Written by editor
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Friday, 04 January 2008 |
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Bulgaria Flat Tax Reform Comes into Force
2 January 2008, Wednesday
The amendments introducing a flat 10% income tax rate in Bulgaria,
which the country's Parliament passed after extensive debates last
month, have come into force on January 1.
Despite extensive criticism from the opposition and trade unions, the
Socialist-led ruling coalition decided also to drop the provision that
exempted the first BGN 200 of all wages from tax.
Under the new tax regime, all who earn below BGN 490 will end up paying more in taxes.
Bulgaria's parliament has been busily amending the tax legislation for
over a month, ringing in the changes required before it could pass the
draft budget for the new year at second reading.
The leaders of the three parties in Bulgaria's ruling coalition have
agreed in summer on the tax reform, with a flat rate of 10%, the lowest
in Europe, replacing the progressive taxation system with three
brackets.
Since Estonia introduced a flat tax system in 1994, enjoying stable GDP
growth, eastern European countries have been attracted to the flat tax
that promises to attract foreign investments and increase transparency.
Slovakia, Romania, Albania and many former Soviet republics have all adopted a flat tax.
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Last Updated ( Friday, 04 January 2008 )
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