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The first outcry for lower taxes
submited on 23.05.2008 in category Political stability | Fiscal affairs | Monetary policy | Regulated markets | Privatisation | Macroeconomic developments | Political stability | Fiscal affairs | Monetary policy | Regulated markets | Privatisation | Macroeconomic developments
submited on 23.05.2008 in category Political stability | Fiscal affairs | Monetary policy | Regulated markets | Privatisation | Macroeconomic developments | Political stability | Fiscal affairs | Monetary policy | Regulated markets | Privatisation | Macroeconomic developments
At first sight not particularly clear as message and claims, the transportation firms’ outcry might have an important place in the political debate in Bulgaria. This is the first organized outcry for lower taxes not only domestically, but also probably within the European Union in the most recent history.
The transporters’ outcry is based on the finding that prices rise and fiscal policy must take this into account. Even without a clearly stated claim, this is a good starting point fiscal policy reconsideration.
The reduction of the rates of direct taxes were steps in the right direction. But this does not mean that taxes declined as percentage of the regitered income in the economy. Today the government succeeded in collecting more money as share of the economy compared with with the times of high and progressive tax scales. Now is the time for reducing this share. Government expenditure must shrink and if the government is making all the right moves it will need even smaller share of people’s money.
If Vat is brought back to its “original” 18%, the budget will receive some BGN 1 billion even with regard to the most consevative forecasts of the consumers’ reaction. This is about 1.5% of GDP, considreably less than the budget surplus. This would be a more social policy than any money distribution among selected “social” groups.
The transporters’ outcry is based on the finding that prices rise and fiscal policy must take this into account. Even without a clearly stated claim, this is a good starting point fiscal policy reconsideration.
The reduction of the rates of direct taxes were steps in the right direction. But this does not mean that taxes declined as percentage of the regitered income in the economy. Today the government succeeded in collecting more money as share of the economy compared with with the times of high and progressive tax scales. Now is the time for reducing this share. Government expenditure must shrink and if the government is making all the right moves it will need even smaller share of people’s money.
If Vat is brought back to its “original” 18%, the budget will receive some BGN 1 billion even with regard to the most consevative forecasts of the consumers’ reaction. This is about 1.5% of GDP, considreably less than the budget surplus. This would be a more social policy than any money distribution among selected “social” groups.
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