Bulgarian Government fleshes out long-term stimulus plan

1192912115756259BULGARIA

The Bulgarian Government will vote on September 16 on a long-term set of measures to lift the economy out of the doldrums, said prime minister Boyko Borissov.

The proposal will be debated by employers’ groups and trade unions within the National Council for Tripartite Cooperation on September 15.

The document, which has been obtained by Dnevnik, consists of 30 policies that are not subject to discussion and measures that yet to be debated by the Cabinet.

An unnamed official of the Council of Minister told Dnevnik the institution could throw its weight behind some of the controversial proposals provided they get the go-ahead from unions and industry.

Highest on the to-do list are speedier value-added tax (VAT) reimbursement and downsizing at the state administration. These two measures will take effect from September, with relevant legislative amendments due to be implemented by the end of the year.

Businesses and unions have come up with an idea to create a unified national information job offer system under the Employment Agency, which will publish job announcements while listing job hunters’ educational and professional background to help companies seeking to hire new staff.

Another proposal is lifting the maximum benefit paid to employees in bankrupt companies to 720 leva from 600 leva at present to beef up protection and security for workers.

The plan also calls for introducing the toughest restrictions on workforce imports from non-EU countries.

Another approved measure is raising the bottom social security threshold for the self-insured to 420 leva from the current 260 leva as of January 1 with a view to patching up the budget of the National Social Security Institute (NSSI).

The proposal to ease the social security burden is still a major bone of contention.

Meanwhile, a report commissioned by President Georgi Purvanov and prepared by the Bulgarian Academy of Sciences (BAS) urged for a complete overhaul of the personal income taxation system, with a suspension of the 10 per cent flat tax rate, a tax-free threshold for monthly incomes of up to 1000 leva and a 20 per cent tax rate for the highest incomes. It also calls for a suspension of the state guarantee on promotional saving accounts and deposits and a blanket state guarantee for all other saving accounts and deposits regardless of size.

The report should be posted on the website of the president’s office today and debated on Friday.

Purvanov said the report was written before the July 5 general elections, which toppled the three-way coalition of socialist leader Sergey Stanishev.

Lachezar Bogdanov, managing partner at local think-tank Industry Watch, warned recently that by meddling with the banking system and pressuring financial institutions the state could wreak long-term damage on the Bulgarian economy.

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