One way to deal with high inflation is to support production and introduce tax breaks. Lowering the VAT on groceries will increase the levy and brighten the industry. The introduction of a “Green certificate“At around 20%, vaccination is a mistake that can lead to a slowdown in economic development.
This is what the financier Plamen said. in an interview with BGNES Danailov, the MP for “There Are Such People” in the 45th and 46th National Assemblies and a candidate for the post of finance minister.
“The three crises – health, energy and high inflation – don’t just happen in our country, they are globally linked. Bulgaria follows the trends that happen all over the world. “Danailov called.
He pointed out that due to the huge amount of money printing over the past year and a half, high inflation is easy to predict. In his opinion, one way to deal with this is to support production. This process is largely within the capabilities of the Bulgarian government and does not depend on foreign support. This can be done in two ways: 1. through direct subsidies to businesses; 2. through tax breaks, the financier pointed out.
According to him, direct subsidies are more likely to fail and even lead to additional problems.
“When tax breaks are introduced, they can help manufacturing companies. I will give you the following example. TISP met this week with representatives of the bread and milk producers’ associations. They are offering, and in their proposals there is a good reason to lower the VAT on groceries. This would also dampen inflation to some extent, because with the lowering of VAT it will be possible to maintain price growth “,Danailov said adding:
“That is of course within the scope of the possibilities of a national assembly. I hope that we will soon have a functioning parliament and an elected government and that we will go in that direction.”
The other instrument that can lower inflation is to raise interest rates, but that cannot happen in our country because we are on a currency board and we have a common European policy. “When the ECB starts to raise interest rates, this process will inevitably come our way. This will take up some of the money in circulation and will certainly bring down inflation. However, this can cause other problems. In the medium term 2022-2023 there are no signs of an interest rate hike “,said the financier.
According to him, it is best to introduce the euro when we have real convergence, that is, our income is close to the European average.
“Apart from the fact that we do not currently have our own monetary policy, the NBB can only exert very little influence. If we join the euro zone, much of the scope for fiscal policy will decrease even more. It is good to bring our income into line with the average European level and then introduce the single currency. I’m not saying we shouldn’t join, but we should do it when the time is most convenient for us. “Danailov called.
In the next national assembly, “There Is Sol Sol” would participate in a policy to lower VAT on food.
“Unfortunately, this is no secret, in large parts of the food industry it is common practice not to issue invoices for deliveries. If we lower the VAT rate, the example of Romania shows that the gray industry is shrinking. In reality, the sales tax revenue in the household will be balanced within one to two years regardless of the reduced rate.said Plamen Danailov
Regarding vaccination against COVID-19, The position of “There are such people”, which was also expressed in the 46th National Assembly, is that it should be voluntary.
According to him, The big mistake – both by the GERB government and the transitional cabinet – is the lack of an education campaign to explain the benefits of vaccination to people. Based on this, anyone can make an informed decision. The problem right now is that there are too many sources of information and it is difficult to make an informed decision. Therefore vaccination against the coronavirus should be voluntary, he said.
“My personal opinion as an economist is that for about 20% of those vaccinated the introduction of a ‘Green certificate“Is a mistake that will slow the economic recovery we saw in the second and third quarters. A number of small businesses can have serious problems and be bankrupt.“Plamen Danailov warned.
The 47th parliament will certainly first examine the state budget. Other important priorities are to encourage investment through tax breaks, particularly in the high-tech sector.
Plamen Danailov also called for family income taxation to be introduced, which would help young families transfer part of the tax. He also defines the latter as a personal reason for dealing with the “demographic death”, because he is the father of three children himself.