In 2007-2008, a single rate for income and profit tax of 10% (or “flat rate”) was introduced in Bulgaria. It is now apparent that this was only the last stage of a long-lasting tax reform which has been going on without interruption under numerous and fundamentally different governments.
Although Bulgaria has officially been in a budgetary consolidation phase during the entire 2013-2015 period, public expenditure went out of control on several occasions. Yet again the newly presented medium-term budget framework provides for decreasing deficits, while current expenditures (and thus deficits) are being hiked.
The brief message of the report regarding the effectiveness of the banking supervision in Bulgaria is unambiguous: yes, the supervision has demonstrated weaknesses, and yes, the CCB management has circumvented and violated the regulations and the good banking practices.
Last month one of the greatest and most extraordinary economists of our time – Douglass North (1920–2015) – departed. He left enormous inheritance of insights that will be considered and re-considered for a long time, and its entire meaning is yet to be discovered and realized.
On July 23, The Guardian published the results of a report by the “Tax Justice Network” (TJN). The title – “Wealth doesn’t trickle down – it just floods offshore” – cannot remain unnoticed by the reading public.
2014 passed under the sign of decreasing unemployment and increasing employment in Bulgaria. Although a big part of the population still hasn’t felt the benefits of these favourable tendencies, they are not only present in the leading economic centres, but also in some of the smaller regions of the country.
In March, Ukraine’s government adopted the Action plan for reforms in 2015 and 2016 while the IMF board approved four-year USD 17.5 bn extended arrangement under the Extended Fund Facility (EFF). The EFF supports ambitious program of Ukrainian authorities, which would in IMF words ‘put the economy on the path to recovery, restore external sustainability, strengthen public finances, and support economic growth by advancing structural and governance reforms, while protecting the most vulnerable’.
IES-Europe together with CEI, IME (Bulgaria), NES (Georgia) and the Friedrich Naumann Foundation for Freedom are organizing three Summer Seminars in 2015 – Bulgaria (July 12-18), Germany (July 19-25) and Georgia (July 21 – 26). Join us and get a better understanding of ideas that allow humans to flourish and prosper!
Just before Christmas, it became clear that the prime minister and the two major labor unions had signed a memorandum which not only prevents raising the retirement age, but also fundamentally changes the pension model of Bulgaria. Noteworthy, the main agents behind this decision were the same people who in 2010 decided to steal 100 million leva from professional pension funds, thus breaking the Constitution.