The Bulgarian government will include a tax exemption for low-income earners in the 2014 draft budget before the bill goes to parliament for a second reading vote, PM Plamen Oresharski was quoted as saying on Nov 19 by investor.bg. The exemption will be in the form of a tax credit, i.e. it will be granted in recognition of taxes already paid.
Oresharski said the tax credit could be first claimed in 2015, when workers earning the minimum wage would be able to apply for tax refunds on income earned in 2014. Accordingly, the proposed amendments to the tax code would need to be taken into account only a year from now when the government prepares the budget for 2015, the PM said.
It is not yet clear how the tax exemption will affect public finances. The personal income tax rate is currently at 10% and according to calculations by the Confederation of Independent Trade Unions in Bulgaria (CITUB) there are 250,000 - 400,000 people earning the minimum wage of BGN 310 (EUR 158.5). The minimum wage is set to increase to BGN 340 next year and will likely rise further in 2015.
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