Following the effective amendment to the Local Taxes and Fees Act as of early 2011, the business sector is scandalised by 10 times higher building tax bills

This year, many companies received shocking building and garbage tax bills, warned business associations. Employers owe over ten times higher local levies for 2011 year-on-year, confirmed the Chairman of the Bulgarian Industrial Capital Association (BICA), Vassil Velev at a meeting with the Parliamentary Committee on Budget and Finance at the end of last week. "The shocking tax increase is a consequence of amendments to the Local Taxes and Fees Act, as a result of which businesses find it impossible to survive," commented Velev.

According to him, enterprises which own real estate will be forced to work for months on end only to pay the prohibitive building tax. The Chairman of the Employers' Association predicted a drastic drop in economic activity, a freezing of business activity, mass bankruptcies and insolvency of companies, as well as the selling of their assets at knock-out prices.

The amendments to the Local Taxes and Fees Act (LTFA) which entered into force on January 1, 2011, stipulate that the building tax is based on the higher book value or the tax assessment of non-residential and manufacturing buildings of companies, which led to a sharp jump of the levy, explained for Klassa daily, Kamen Kolev, Deputy Chairman of the Bulgarian Industrial Association. He confirmed the information that this year's surge in local taxes for companies exceeded 10 times the amount in previous years. "It depends on the year of the buildings' construction, as well as on their depreciation rate, but the taxes should be paid regardless of whether the enterprise has any revenues or has frozen its business activity," specified Kolev.

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