Bulgaria's Deputy Prime Minister and Finance Minister, Simeon Djankov, stated Saturday that Value Added Tax, VAT, could be lowered this year, depending on budget 2012.

The news was reported by the Bulgarian National Radio, BNR.

Djankov said the cabinet is currently expecting the results from the implementation of the budget for the next 3-4 months, and data since the beginning of the year was good with BGN 200 M more in revenues than planned, thus the decision on VAT could come as early as May.

The Minister explained that he wanted to have a 2-stage VAT reduction – from 20% to 19% first and from 19% to 18% later.

"Every VAT percentage point equals BGN 700 M in the budget, so going to 19% would mean BGN 700 M less in the treasury. Demand is up slightly, so we expect an additional BGN 150-200 M. We are talking about BGN 0.5 B net that would not enter the budget, but it would be beneficial for all consumers," Djankov explained.

When asked if VAT differentiation was possible, he stated that Bulgaria already has a different VAT in the tourist sector, but declared that until he is Finance Minister, he would not allow a second one, despite EU directives giving the green light for such move.

On Friday, Prime Minister, Boyko Borisov, said in the Parliament that VAT might be lowered by end of the term of the current government of his ruling, center-right Citizens for European Development of Bulgaria party, GERB.

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