Bulgarian Government Plans To Cut Corporate Tax Next Year

by Ulrika Lomas, Tax-News.com, Brussels

31 October 2003

In the hope of encouraging further investment and stimulating economic growth, the Bulgarian government on Wednesday unveiled a proposal to cut the nation’s corporate tax by 4%.

This will see Bulgaria’s corporate tax rate fall from its present level of 23.5% to 19.5%. Prime Minister Simeon Saxcoburggotski explained that this would have the effect of releasing an extra BGN150 million ($90 million) into the country’s economy.

“These are funds which will create new jobs, modernise manufacturing and make enterprises more competitive”, the Prime Minister commented following governmental approval of next year’s draft budget.

The new budget is calling for acceleration in economic growth to 5.3% next year, up from 5% this year, and also envisages a budget deficit of 0.7%.

Bulgaria joins a list of many Eastern and Central European nations who have announced corporate income tax cuts as they prepare for EU membership, including the Czech Republic, which intends to cut corporate tax to 24% by 2006, and Hungary which is planning a reduction to 16% next year.

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