The package agreed by the ruling coalition provides incentives worth two billion levs ($ 1.1 billion), ranging from the elimination of VAT on bread, fuel subsidies, increased pensions and tax cuts for young families, according to Agerpres.
The new package adds to other measures already in place that have kept electricity prices unchanged for households since July last year, as well as compensation to companies for high energy costs.
“The measures are an opportunity to support the most vulnerable, who are most at risk from the impact of inflation and have a specific focus on fuel and energy,” Prime Minister Kiril Petkov told reporters. “The package guarantees that the standard of living for all Bulgarian citizens will be maintained,” Petkov added.
According to the plan unveiled on Wednesday, starting with July 1, state pensions will be increased by an average of 20%, the Value Added Tax on bread will be eliminated for 12 months, VAT on heating and natural gas for households will be 9% for one year. The Sofia government will also offer a 0.25 lev discount per liter for petrol, diesel, LPG and methane from July until the end of the year.
Sofia authorities estimate that the new package will not increase the budget deficit target of 4% of GDP this year and will be financed by increased tax revenues. One source of funding will be the taxation of excessive profits from energy companies as a result of rising oil and gas prices. The exact calculations will be made when the state budget is rectified in July, Bulgarian Finance Minister Assen Vassilev said.
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