Bulgaria will retain the flat VAT rate of 20% in 2027, if no legal change is adopted. This was stated by Bogomil Nikolov from "Active Consumers" in the program "Bulgaria Morning" on Bulgaria ON AIR, commenting on the food price inspections. Nikolov linked the problems at the stands to the lack of sufficient competition and the weakening of local production. "When you don't have competition, you get these defects in the signs," he said. According to him, the Commission for the Protection of Competition has conducted an analysis that shows structural problems in the market. Nikolov stressed that mark-ups are not prohibited in themselves and that the consumer should have a choice between more offers, instead of the state setting prices.
Tomato production is declining
According to Nikolov, the area sown with tomatoes has shrunk from 25,000 decares last year to 14,000 decares this year. He described the decline as a serious problem for the supply of Bulgarian produce.
The chairman of “Active Consumers“ rejected the explanation that large retail chains simply do not allow small producers. According to him, retail chains have difficulty working with producers who offer small quantities. Nikolov insisted on changes in the subsidy policy and on encouraging cooperatives and direct sales.
He also gave an example of the quality of some foods. “You pay for expensive water“, said Nikolov, referring to his claim that some of the lower prices are achieved through products with a higher water content.
Denmark is preparing a change, but not from January 1
In the interview, Nikolov said that from January 1, Bulgaria will remain the last country in the European Union with a flat VAT rate and that Denmark will introduce a zero rate for fruit and vegetables. Verified data shows a different timetable for the Danish measure.
Denmark is indeed the only country in the EU, apart from Bulgaria, that applies a single basic rate without a common reduced rate for food. The standard VAT there is 25%, while in Bulgaria the standard rate is 20%.
The Danish government and several parties have reached an agreement to set aside 6 billion Danish kroner per year from 2028 to reduce VAT on food or eliminate it for fruit and vegetables. The specific model has not yet been finalized, and the change is not planned for January 1, 2027.
Proposal for a tax refund
As an alternative to a general VAT reduction, Nikolov proposed that the tax be refunded to the most needy consumers. According to him, this can be done via a card or code, where the amount is returned at the end of the month after the purchases.
He emphasized that the goal of consumer protection is not for an official to calculate how much bread or tomatoes should cost, but for the buyer to receive clear information and not be misled.
Sources: dnes.bg, old-news.bnr.bg, danishnews.cphpost.dk