After the reduction of VAT for establishments from 20% to 9% in connection with the coronavirus pandemic, revenues in the budget to increase by nearly BGN 200 million. The Association of Restaurants in Bulgaria believes that the return of the higher VAT will be detrimental to the budget. It is important to remember that the measure was introduced temporarily – only for the coronavirus period, which is long gone.
Official data show that in 2019, direct and indirect taxes from food and entertainment establishments amounted to BGN 440 million. For 2023, the amount is BGN 560 million. The estimated results for 2024 are that the amount will reach BGN 640 BGN million
The good news is that over the past 5 years, the share of the gray economy in the industry has decreased dramatically – from 50% in 2019 to 20% in 2024. The forecast is to melt up to 5% in the next 2 years. The reason for the optimistic forecasts is the fact that in 2019 the declared turnover was in the amount of BGN 2.3 billion, and in 2023 it will already be BGN 5.3 billion. For the current year, it is expected to exceed BGN 6 billion.
According to the Association of Restaurants in Bulgaria, in the period of reduced VAT, namely the last 3 years, an increase in salaries, a higher tax base and more turnovers have been observed.