Bulgaria: With the zero rate of VAT on bread, the shadow economy disappeared

Published 2024년 10월 23일

Tridge summary

The chairman of Bulgaria's Bread Producers' Association, Dimitar Ludiev, has expressed satisfaction with the stability of the bread and bakery market since the introduction of a higher VAT rate three years ago, crediting it for driving out the black economy and keeping prices stable. He warns that an increase in the VAT rate next year could lead to higher bread prices, as seen in other EU countries. Ludiev also addressed concerns about the potential impact of energy costs and production technologies on bread prices, stating that these factors have less impact than the VAT rate. Furthermore, he highlighted the difficulty in regulating the maximum markup of 15% that grocery stores can charge and stressed that bakeries operate with a narrow profit margin.

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Original content

"There are prerequisites to keep it, because 3 years since this rate was adopted, the market of bread and bakery products is much more stable. The black economy has almost disappeared from our industry. Consumers get our products at a good price. The most important thing is stability in the industry. The other important thing is that small and medium-sized enterprises have come to light, they are now working normally," said the chairman of the Bread Producers' Association, Dimitar Ludiev, for "Bulgaria morning". He clarified that if a higher VAT rate is imposed from next year, it means more expensive bread. "When the zero rate was adopted, all correct producers reduced their prices by 20%. Now, if a rate of 20% is adopted - the price will jump by exactly that much. In the EU, almost all countries have either a lower or a zero rate." Ludiev added on the air of Bulgaria ON AIR. The guest appeals to consumers to be careful and read the labels. "I don't think there will be Ukrainian ...

Source: Dnes