Reduction of VAT on fuels to be considered if Brussels refuses Bulgaria a lower excise duty

“The Government is ready to consider the idea for a reduction of VAT on fuels,” Minister of Transport, Information Technology and Communications, Aleksandar Tsvetkov, said yesterday. This may happen if the European Commission (EC) does not allow Bulgaria to decrease the excise duty. “I do not have the competences to influence taxes. Thus, I expect an initiative from my colleague, Finance Minister Simeon Djankov,” specified Tsvetkov.

On the order of PM Boyko Borissov, an interdepartmental expert panel will prepare a comparative analysis on the price levels of the different types of fuels on the domestic market and in other EU countries. The situation on the fuel market in Bulgaria will be discussed tomorrow at a meeting with representatives of manufacturers and dealers of fuels and the organisations of carriers, the Government press service announced officially.

“We will immediately send a written inquiry to the EC whether Bulgaria can change the excise duty on fuels. In order to change the excise duty, however, 26 countries must agree. Need we lie to people? I will send a letter, but practically it will not contribute anything in the coming months,” explained PM Borissov yesterday.

According to experts, the VAT on fuels is calculated twice – once on the input and then again on the final product plus the excise duty. For a differentiated, i.e. different VAT on a single item, however, Brussels’ permission must be sought.

“We are making huge efforts. We are doing everything possible. I want to, but I cannot influence global processes. Japan’s billions of losses must also be compensated. When the U.S. Sixth Fleet is heading somewhere, things never go the best way,” commented the Prime Minister.

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