During the fiery discussions of the revised budget for 2014 there was one vote in Bulgarian parliament that remained out of the limelight. On one and the same day the MPs voted in favor of leaving the 20 percent VATon food, medicines and textbooks unchanged and rejected the proposal for taxation of games of chance. According to MPs, the taxation of revenues from games of chance would bring EUR 2.5 million to the budget. However, the center-right government coalition voted against the proposal tabled by socialist Georgi Kadiev for taxation of revenues from gambling even though a week earlier it supported the proposal in the ad-hoc commission and even submitted an identical text for discussion by parliament.

The same day, while government and opposition were in the heat of the discussion on gambling, Parliament rejected another proposal for tax changes submitted by Ataka party. The draft included zero VAT on food produced in Bulgaria, medicines and textbooks. These and all other commodities are currently subject to 20% VAT. The arguments are low incomes, which lead to a low purchasing power, and progressively rising food prices in Bulgaria. Furthermore, Bulgaria is among the few EU countries where there is no differentiated VAT rate for goods of social significance such as food and medicines. In Luxembourg for example, which boasts the highest incomes in Europe, food is not subject to VAT.

In their decisions the MPs should be guided by personal expertise or the opinion of world-renowned experts. However, MPs are obviously not familiar with the World Bank findings on the social stratification of Bulgarian school students. This analysis ascertains that the Bulgarian educational system does not provide equal opportunities to children from different social backgrounds. Poor students lag behind students with a better social and economic background, the analysis reads. Against this backdrop, the National Assembly decision to levy a tax on textbooks seems inappropriate. The MPs argued that the VAT on  food, medicines and textbooks must be kept because of lack of funding as this measure will need financing of € 600 million. Part of the money may be covered by the tax on games of chance, for example. It seems that most of the MPs have reconsidered their decision and will still amend the Gambling Act. But the bitter aftertaste of the vote in support of lottery bosses and to the detriment of citizens, will remain.

English: Alexander Markov