BMGC: Additional tax on mining resources risks closing down the entire industry Trade unions prepare protests today

The introduction of a new additional tax on underground resources risks closing down the mining industry, warns the Bulgarian Mining and Geological Chamber (BMGC). "We object and are categorically against all the proposals for amendments to the Underground Resources Act (URA) provided for in the Draft State Budget Act of the Republic of Bulgaria for 2025 (PZDBRB), published on the official website of the Ministry of Finance on December 9, 2024. We dispute the accuracy of the motives with which the Minister of Finance and the Council of Ministers justify the proposals for amendments to the Underground Resources Act," states Eng. Dragomir Draganov, Chairman of the Board of Directors of the Bulgarian Mining and Geology Chamber in the position of the industry, distributed to the competent institutions and the media and quoted by BTA.

The chamber points out that the proposed changes to the Underground Resources Act have not been discussed with the mining industry and were first presented on December 9, 2024 after the publication of the proposed new tax burden on the website of the Ministry of Finance.

The introduction of a new tax would put mining companies at a disadvantage compared to competitors in the sector in Europe and the world, which do not have a similar combined tax burden. As a rule, turnover taxes in EU countries are imposed only on consumption, and not on the turnover from business activities of a certain group of entities. There is no analysis to argue the proposed changes, their effects on the industry and the country's economy," Eng. Draganov also stated in the published position.

The mining sector plays a key role in the economy, the chamber reminds. Companies in the sector not only create jobs, but also invest in infrastructure and social projects, helping to develop local communities. Any increase in the tax burden would lead to a decrease in these investments, which would have a direct negative impact on the economic and social sustainability of the regions, the organization believes.

According to the Chamber, this tax could lead to an outflow and migration of highly qualified specialists, job cuts, which would increase social tension and lead to emigration of the population. Given the fact that the mining industry in Bulgaria is among the largest employers, the reduction of jobs would affect not only the industry, but also other related sectors.

The introduction of an additional tax on the extraction of subsoil resources would also contradict Bulgaria's international commitments to promote sustainable development and protect critical resources, the organization believes. The planned amendments, if adopted, will have a significant adverse impact on the operational activities and future investment plans of enterprises in the sector.

The organization calls on the Ministry of Finance, after conducting a thorough analysis of the economic and social impact of the proposed tax, to consider alternative measures to increase budget revenues that do not lead to discrimination and disrupt the sustainability of strategic sectors, such as the mining sector.

Earlier today, the American Chamber of Commerce in Bulgaria also opposed the proposed additional tax burden on strategic sectors of the Bulgarian economy, such as the mineral industry, in the draft budget of Bulgaria for 2025. The position has been sent to the Speaker of Parliament, the acting Prime Minister, and the Ministers of Energy and Economy.

At the same time, the Federation of Independent Miners' Unions under the Confederation of Bulgarian Trade Unions and the Trade Union Miners' Federation of the Confederation of Bulgarian Trade Unions "Podkrepa" are organizing a protest in front of the Council of Ministers building against the planned introduction of a tax on the extraction of underground resources.

The protest will take place before the start of the meeting of the National Council for Tripartite Cooperation, at which the draft Budget 2025 will be discussed. It is expected that 1,000 workers from the mining sector will be included in it.

We recall that the Ministry of Finance has already presented its proposal for a draft budget for 2025. with a deficit of 3 percent, which includes an increase in levies and new taxes.