Bulgarian restauranteurs and hoteliers are staging a series of protests after the government reinstated a 20% VAT rate on their services at the start of this year.
The rate was reduced to 9% for restaurants in July 2020 to shield the hospitality industry from the impact of the COVID pandemic.
It was supposed to return to 20% at the end of 2023 but the lower rate was extended by a year for restaurants and catering services, and by six months for tourist services and sports facilities.
Kadir Mustafov, the chairman of the Bulgarian Association of Restaurants, said that Bulgaria is one of the few countries in the EU with considerable tourist sectors that does not apply a reduced VAT on hospitality services as a norm.
The reinstated 20% rate is expected to bring about an increase in prices projected at 15-20% or even more, causing many restauranteurs to fear they will go out of business.
Faced with bankruptcy as the alternative, many businesses may opt to keep some of their income off the books, which would ultimately hurt public coffers rather than contributing to them, sector insiders have said.
Protesting at the return to the old 20% rate, restaurants across Bulgaria shut down and turned off their the lights at 9 p.m. for nine minutes over the weekend.
On Monday, representatives of the industry pledged to continue their “9 Minutes of Darkness for 9% VAT” protests daily until the parliament adopts the 2025 budget, Bulgarian state news agency BTA reported.
Business associations have also warned that they will escalate protests if the government does not vote to keep the reduced rate, with a large-scale demonstration to be organized in the capital, Sofia, the Novinite news website reported on Monday.
With another temporary shutdown scheduled for Wednesday, some protesters also said they will block roads and bridges.
Kadir Mustafov, the chairman of the Bulgarian Association of Restaurants, said that Bulgaria is one of the few countries in the EU with considerable tourist sectors that does not apply a reduced VAT on hospitality services as a norm.
The reinstated 20% rate is expected to bring about an increase in prices projected at 15-20% or even more, causing many restauranteurs to fear they will go out of business.
Faced with bankruptcy as the alternative, many businesses may opt to keep some of their income off the books, which would ultimately hurt public coffers rather than contributing to them, sector insiders have said.
Protesting at the return to the old 20% rate, restaurants across Bulgaria shut down and turned off their the lights at 9 p.m. for nine minutes over the weekend.
On Monday, representatives of the industry pledged to continue their “9 Minutes of Darkness for 9% VAT” protests daily until the parliament adopts the 2025 budget, Bulgarian state news agency BTA reported.
Business associations have also warned that they will escalate protests if the government does not vote to keep the reduced rate, with a large-scale demonstration to be organized in the capital, Sofia, the Novinite news website reported on Monday.
With another temporary shutdown scheduled for Wednesday, some protesters also said they will block roads and bridges.
More In Business MORE...
