The proposed tax on excess profits is not an anti-inflationary measure, said financier and former Minister of Economy Nikolay Vassilev. According to him, some of the proposals for tax changes are related to increasing budget revenues, not limiting inflation.
He gave examples of restrictions on the export of wheat, electricity and petroleum products in recent years.
According to him, the proposal for a tax on excess profits is among the most left-wing measures of recent decades.
„In an open market economy, Bulgaria should be proud of being a member of the European Union, the eurozone, and we have been in an open market economy for decades. There must be freedom for business“, Vassilev said.
He rejected the argument that the tax would help the funds stay in Bulgaria, instead of being distributed as dividends.
“Let's impose a 99% profit tax, I'll tell you what will happen“, commented Vassilev and warned that in his opinion excessive taxation could repel business and investments.
The financier described as a “bad PR attempt“ the claim that the increase in the profit tax is related to supporting families.
“I am in favor of tax breaks for child development, child benefits and even much deeper demographic policy measures“, he said.
According to Vassilev, instead of increasing taxes, the state should reduce its spending. According to him, this can be done by reducing the state administration and reforms in the public sector.
“In my opinion, they should not raise any taxes, but should reduce spending by 7 billion euros“, he said.
Vassilev also commented on the warning that the tax on excess profits could have an impact on end consumers.
“Banks will probably raise interest rates on loans. Telecoms will probably not invest huge amounts in the best technologies“, he said.
However, he expressed reservations regarding food vouchers up to 200 euros. According to him, the introduction of new tax rates complicates the system.
“From the beautiful and so elegant, simple Bulgarian tax system we are moving towards chaos, tax chaos“, commented Vassilev.
He also supported the idea of updating the tax assessments of properties. According to him, the current assessments are too low and do not correspond to market conditions.
Regarding the proposed excise tax for powerful cars, Vassilev said that he was initially against it, since the proposal also included electric and hybrid cars.
“In no case electric cars, because there the opposite - I think the state should support the purchase of electric cars. Now it will want to impose an excise tax on them. They got confused, they did not understand what they did“, he said.