Tax incentives for research and development make sense. This thesis is defended by economist Petar Ganev from the Institute for Market Economics in a publication dedicated to the state of the fiscal system. Earlier this week, Deputy Prime Minister Tomislav Donchev announced a similar measure.
Bulgaria has managed to maintain a low tax burden on companies for nearly 20 years, but without seeking additional measures to support investments. It is the level of private investment in the economy, along with corruption and misunderstandings in the judicial system, that is one of the main dividing lines with the successful countries in the Central and Eastern European region, writes economist Petar Ganev.
According to him, investment activity cannot be unlocked with tax measures alone, but can be stimulated with the mechanism of rapid depreciation (100% in the first year for machinery and equipment, vehicles, computers and software) and a tax incentive for innovation and development expenses (recognition in double amount when determining the tax financial result).
"Exactly in the opposite direction of this philosophy is the pressure to increase the insurance burden. The increase in the pension contribution by 3 percentage points will hit the disposable income of households in the country and will punish hard work. Such a policy aims only to patch up the budget – workers to pay for politicians' gifts, without in any way taking into account the effect on economic growth and incentives for creating well-paid jobs "in the open", commented the expert from the Institute for Market Economics.
According to Petar Ganev, experience shows that when the labor market is in good health, the treasury's revenues from taxation of workers are high. This is also observed this year - as of August, workers have paid 1.7 billion leva more in social and health insurance contributions and over 700 million leva in additional income tax (compared to August 2024).