Title: Bulgaria‘s Hospitality Industry Faces 20% VAT Hike, Warns Association Chair
Representatives of Bulgaria’s hospitality sector have expressed concern over the government’s plans to increase Value Added Tax (VAT) to 20% next year, potentially driving up costs and forcing businesses to pass them on to consumers.
Richard Alibev, Chair of the Association of Establishments, told NOVA BG that the situation is far from ideal, stating that parties that committed to extending low VAT rates have not yet lived up to their promises. He believes that if these parties do not act soon, prices in establishments could rise by 7% to 10% within a week.
Alibev emphasized the need to maintain the current 9% VAT rate for the hospitality sector, extend the zero VAT rate on bread until the end of 2025, and reinstate energy subsidies. He warned that any increase in VAT for the sector would be detrimental, given other inflating factors like energy prices, salaries, and potential alcohol and tobacco tax hikes.
Currently, the average salary for a waiter in Sofia is around 1,000-1,500 BGN, excluding tips. Alibev highlighted the importance of legalizing and taxing tips, ensuring fairness and transparency in the industry.
In an effort to maintain a responsible atmosphere, Alibev reminded the public that establishments do not allow minors under 18 to consume alcohol or smoke.
As the situation unfolds, hospitality businesses and consumers alike await decisive action from policymakers to mitigate the potential impacts of the upcoming VAT hike.
