PM proposed reduction of VAT for restaurants and entertainment sector to 9%

VAT for restaurants, catering and places of entertainment categorised under the Tourism Act will be reduced to 9% as of January 1 2021, Bulgarian Prime Minister Boyko Borissov proposed after a working meeting with representatives of the Association of Restaurants in Bulgaria and the Bulgarian Hotel and Restaurant Organisation on May 12.

Reducing VAT was one of the demands of the industry. Prime Minister Borissov stressed that the decision bears a political risk, but is in support of the restaurants because of the losses they suffer from the COVID-19 crisis.

Lachezar Zahariev, Association of Restaurants: We are extremely pleased with the promise made by the Prime Minister. Due to the budget framework, our initial request for 5% VAT proved to be practically impossible.

Borissov emphasized that with the changes discussed, with the reduced VAT, it means that the turnover and activity of restaurants and hotels should be 100% in the light.

"In this regard, we are obliged to fulfill our commitments. The Minister of Finance is very much against, but I want to refute it at the end of the year with more revenue," said Prime Minister Borissov.

"We undertake this commitment that this will happen the way we discussed it with you," industry representatives said.

In the meeting it was also agreed to postpone the entry into force of the amendments to Ordinance H-18 for a period of one year, as a result of which it will come into force on March 1, 2021. This regulation governs fiscal reporting through cash registers.

The drafting of an anti-crisis plan will be assigned, including the provision of loans and grants by BDB. Experts from the tourism" sector will take part. The abolition of the criterion of no debt to the state only for 2020 when applying for measures to deal with the economic consequences of the coronavirus was also discussed.

Borissov said that the proposed amendments for the VAT reduction would be tabled in the Parliament by the parliamentary group of his GERB political party today.