It is realistic to think of reducing the VAT below the current 20 per cent, as GERB has promised, in the third of fourth year of the new government's tenure, Deputy Prime Minister and Finance Minister Simeon Djankov told the press in Rousse. It also emerged during his visit here that the payment of overdue VAT refund money to businesses has already started and that the information systems of the Revenue Agency and the Customs Agency will be linked up a couple of weeks from now.
Simeon Djankov was in Rousse for a meetings with the local officers of the Revenue Agency and the customs administration - the first of a series of meetings he said he will held on a weekly basis.
He said that the VAT cannot be lowered next year and not even in 2011, when Bulgaria is expected to be in the process of leaving the period of crisis. "But once we are out of the crisis, it will be good to cut the VAT," said Djankov.
Businesses have already got some 160 million leva in VAT refund from a total of 600 million leva that has been overdue, said Djankov. The payment of VAT refunds started as early as this week, allowing the government to keep one of GERB's election campaign promises for payment of VAT refund within a month.
Djankov explained that he had ordered payment of 300-350 million leva in VAT refund by mid-August and the entire 600 million in about six weeks.
The Finance Minister also said that a linkup of the information systems of the revenue Agency and the Customs Agency will be ready in the next couple of weeks.
"That is easy to do technically, but the political will was lacking to do it," the Minister commented.
He believes that such a linkup alone will ensure some 200 million leva in fresh revenue into the public purse.
However, cracking down on smuggling through the Bulgarian border remains the Finance Ministry's priority as it works to offset the deficit in this year's budget.
The deficit is expected to be around 1.3 billion leva after cutting ministry expenses for a total of 1.2 billion leva.
The Deputy Prime Minister made it clear that people previously holding a position on the same level as his own, had provided an umbrella for slugglers and profited from that.
By way of example, he said that nota single ordinance has been signed in the past four years to authorize an inspection of the fuels in filling stations, which has resulted in rampant contraband. "There were days when the border barriers were virtually lifted to let in trucks with contraband goods," he said.
In his words, the total amount of lost customs and excise duty is close to 1.2 billion leva which is almost as much as the budget deficit of 1.3 billion, he said.
During Djankov's visit to Rousse, the Rousse-based Bulgarian-Romanian Chamber of Commerce and Industry handed him a declaration that calls for scrapping the charges for crossing the cross-Danubean bridge at Rousse-Giurgiu and building a motorway between Rousse and Shoumen which are slightly over 100 km apart.
Chamber President Alexander Prokopiev said that the charges for crossing the bridge stand in the way of the free movement of people and goods, impede the development of economic ties to their full capacity and hamper social exchange. A further argument that a motorway from Rousse to Varna through Shoumen (a motorway already links Shoumen and Varna) will provide a connection between the European transport corridor along the Danube at Rousse, with the Port of Varna, according to the Bulgarian-Romanian Chamber.