Deputy Prime Minister Pekanov: Progressive income taxation is not so risky

Industry / Bulgaria
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In general, I think it is very important to have this debate. Unfortunately, Bulgarian society is already accustomed to and fully accepts the current system. It is perhaps even the most regressive in all of Europe precisely because there is not even a non-taxable minimum. This was recently explained by the Deputy Prime Minister for EU Funds Atanas Pekanov on the occasion of the ideas for progressive income taxation.

"It can be said that even the highest incomes, if we take health insurance, are less favorable than the lowest, precisely because there is no non-taxable minimum. And there is one in all other countries. This would be the first step towards the introduction of a more progressive system," Pekanov explained.

For a change in taxes, I personally do not see such risks, as is often speculated, from a higher rate for the highest incomes. In the end, we have to be small and up to date, in many other countries these are the conversations that are taking place, as well as what the corporate tax should be, whether we should allow it to be 0% in some countries, which leads to tax evasion for the largest who can get away. And we need to have these conversations. From my experience in the countries where I have lived - Austria, England, Germany, I do not see such a drama of the progressive tax system, as is often said here. Yes, we may have had positives from the flat tax for a long time, but at some point we may have to adapt to more European tax systems.

"For a long time we were shown a vision, which was perhaps fashionable in the 80s and 90s of the last century, that high taxes have the effect of discouraging your work, because you do not get as much as now, from him, this leads to a lower desire to work. In places in Western Europe, where taxes are extremely high, although I personally would not support such a thing, it does not change the overall picture, "Pekanov explained in his presentation.

The truth is that not everyone will run away if taxes increase, because there is nowhere to run. In any case, in our country they are almost the lowest in the whole of Europe, so people will not move to other places, because there the taxes can reach 30-40-45%, the Deputy Prime Minister added.

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