Standart News

Higher tax rates for middle class and affluent Bulgarians may be an effective measure against the economic downturn. To overcome the crisis Bulgaria should give up the flat tax and introduce progressive tax rates instead, say Gancho Ganchev and Chavdar Nikolov of the Southwestern University. They suggest that the minimum wage and tax exempt minimum income should be 300 leva (about 150 euro.) In their opinion, a monthly income up to 1000 leva should be levied with a 10-percent tax; those with incomes of 1000-2000 should pay 15 percent, while all with earnings of over 2000 have to pay 20 percent. Thus all representatives of the middle class (those with incomes of 1000 BGN/month) will pay higher taxes. Their opponents, however, maintain that this step will increase the share of gray economy and eventually reduce tax revenues.