Assoc. Ivan Mitev in front of FACTS about the miners' protest: It is unreal for an industry to be taxed four times

Miners gathered in protest in front of the Council of Ministers building. Their requests are aimed at the plan-account for next year. Dissatisfaction of the trade unions with KNSB and KT “Support“ is because of the idea to introduce an additional tax on the extraction of underground resources. The industry says that there is no way to pay salaries, there will be bankruptcies and job losses if the budget is voted as planned. In front of FACTS, Assoc. Ivan Mitev, executive director of the Bulgarian Mining and Geological Chamber.

- Assoc. Mitev, the Ministry of Finance envisages the introduction of a “tax on underground wealth” in the new draft budget. This is related to the mining sector. The goal is to raise a new 900 mln. leva. What measure is this…
- The measure is alien. I say that ironically, of course. What they propose is not a practice in any European country. Not to mention that it is unique to our country, because it is the fourth tax in a row in our business. Once we have a concession fee, once a profit tax, once a corporate tax and now this is a fourth tax. It is unrealistic in a market economy for an industry to be taxed four times. So we are strongly against it.

- The explanation is that there is a need to achieve an up-to-date level of payment for the right to extract underground resources on the territory of the country, which are exclusive state property. Do you accept it…
- In conversations with various state institutions, we analyzed the legislation of seven EU countries regarding the mining sector, underground resources, etc. The analyzes showed that we do not differentiate ourselves from what is happening in Europe in terms of legislation and taxation of the activity in this industry. We want justice. But I don't know where you see her under those conditions. It is clear that the state has more expenses and revenue is sought, but not so. Our income has not increased. Why haven't they increased? Because we are not opening new deposits, there are none. If we have new fields opened, there will be more for the treasury, for the budget. That's how the problems come. The administrative burden hinders the economic development of the branch.

- Was there a dialogue with the industry, or was it simply seen in the draft budget…
- There was a month of silence. A whole month of silence. During this month we wrote letters, called… The mining and geological branch has always been dialogic. We have always sought a dialogue with every state institution, because in dialogue the truth is born. A month of silence. Neither the Ministry of Finance nor the Council of Ministers took our requests seriously. Only the Ministry of Economy approached us and we talked, but they too were not familiar with this tax, which we are now commenting on. This new tax will hinder the industry, the economy in Bulgaria.

- Can the mining industry take it? We see that the budget is being made with a vision of a 3% deficit and money is being sought?
- We fully understand that money is being sought for the budget. But these 900 million have nowhere to come from, because purely economically they are not there. At the moment we pay about 1 billion in taxes including all insurance, levies, concession payments. And the tax in the social system… Business invests a lot of money in the regions.

- So another billion is wanted from you. Is that how it comes out …
- They may be sought, but there is nowhere for them to come from, because we do not have such financial results. Yes, we can certainly do it if there are new deposits discovered, but to date there are none. There are over 300 files that are delayed by various institutions. Administrative delay delays proceedings. Who and how to make this 1 billion… Isn't it clear - in order to pay this billion, someone has to make it. How to do…

- This is probably requested once, only for this year...
- What the state is proposing is change through the back door. Let's put it this way. There will be a vote now on the budget, and then in the Transitional and Final Provisions they will introduce a new chapter in the Mineral Resources Act and this tax will be set in principle. This means that we cannot wait for a single lev investment in this sector if this goes through. What signal are we giving to all investors, to anyone who wants to invest in the sector… Bad signal. It's just that people with money will close their investment eyes to us, to another sector in the Bulgarian economy, because we already have that in other sectors.

- You organized a protest, do you expect dialogue?
- I sincerely hope that there will be a dialogue. I believe that we will work together and in sync with the state. Otherwise, protests are a last resort, because we are simply facing the wall. One month, I repeat, one month of no dialogue and suddenly they want to collect all our money. And our business is directly responsible for schools, for construction, for infrastructure, for hospitals in the various regions. Who pays for these things in the regions – the business or the state.