The government of Bulgaria has confirmed that it will keep its 20% VAT rate for the foreseeable future as part of its flat tax policy.
Bulgaria has one of the lowest VAT rates in the region. Some other countries in central Europe have been compelled to raise their VAT rates in an effort to gain more tax revenue.
Economists believe that a value added tax with a broad base and a single rate gives a more stable and less distorting tax regime. The only use of a reduced VAT rate in Bulgaria is for hotel accommodation at 9%.
