BULGARIA The change of ideas and mind

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BULGARIAThe change of ideas and mind

• Svetla Kostadinova
• Institute for Market Economics (IME)

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IME

• Established in 1993
• Free market ideas
• Young people
• Wide use of media to sell its ideas
• Tools press-conferences, bulletins, articles,
  special reports, work with all political parties,
  administration, students, etc.

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State of affairs

• Fall of communism in 1991
• Big government failure in 1996-1997
• Recovery since 1997 when Currency board is
  introduced
• NATO accession in 2001
• EU accession in 2007

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IME

• In 2002 IME set 3 distinguishable targets
• Corporate tax rate flat 10
• Income tax rate flat 10
• Social security contributions 10
• And propose reforms accordingly

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Taxes in 2002

• Corporate tax rate 23.5
• Income tax rate 18 - 29
• Social security contributions up to 42.7
• ( includes health, pension, unemployment,
  maternity)

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IME tools of Low Taxes Campaign

• Press-conferences
• Open Letters
• Flat Tax Bulletin for Low Taxes
• Articles, TV and Radio Shows
• Alternative State Budget with Low Taxes
• Tax Freedom Day
• Government Spend-o-meter
• Economic Freedom 2 Indexes
• Budget Parliament Committee hearings
• Political parties programs
• Draft State Budget proposals
• Doing Business presentation
• Tax calculator of political parties proposals

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The results
Profit tax
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The results
Income tax
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The results
Social security contributions
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Bulgaria reacts
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Other important reforms

• Education semi-voucher system and exit exam -
  2007
• Business environment trade registration out of
  court 2008
• Court private bailiffs introduced 2006
• Pension second pillar private accounts
• Bank sector liberalized
• Decentralization municipalities can set local
  tax rates in certain limits
• Work first 2008

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Plans

• De-monopolization of the state health care fund
  and introduction of private health accounts in
  discussion
• Regulation impact assessment to be applied since
  June 2008
• Introduction of transitional sovereign wealth
  pension fund law to be voted in May - June 2008
• Reduction of licences by 25

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Upside down

• Current socialist party
• Low taxes is not right policy
• and
• We have done everything to help the business,
  let it help you now

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• Thank you!
• Svetla Kostadinova
• Institute for Market Economics, BULGARIA
• svetlak_at_ime.bg
• www.ime.bg