Sunday, 22 November 2009

1 BGN Leva Tax On Commercial Rakia For Increased Government Revenue

I was shocked when I first saw this report thinking that the Bulgarian government had gone back on their word. I quickly realised that this applies to commercial rakia distillers and does not affect home distilled rakia - PHEW!

1 BGN Leva however does not sound a lot of money but when you put it in a percentage of the cost of a 1 litre of local commercial rakia it works out at over a 12% increase (i.e. 8 BGN Leva to 9 BGN Leva.) This may well of course mean that more Bulgarians will turn to distilling their own in view of this with a litre costing around 2 BGN even with buying the sliva or grapes (see my post on the cost of making rakia without your own grapes.)

In turn less Bulgarians will buy rakia off the shelf and the increase in duty will be a false economy. I agree that Bulgarian will never be put off Brandy (rakia) it is their heritage after all. It's bit like the British giving up curry (tongue in cheek!)

Higher excise will not make Bulgarians go off brandy, and will not fill the revenue: BranimirBotev

If the parliament passes the decision of the Commission for Budget and Finances for raising the excise of hard drinks the increase will be over BGN 1 per 1 liter of 40-degree alcohol. The sum is determined by the raise in the excise duty and VAT and also the trade discount, which is a percent of the quote. I am not sure that the increase would be passed by the parliament, chairman of the Association of Producers, Importers and Traders of Spirit Drinks (APITSD) Branimir Botev said in an interview with FOCUS News Agency.

PM’s statement on the issue was quite clear and he approached to the problem as expert in psychology of the Bulgarians. Bulgarian will never go off his brandy – he purely and simply will look to buy something with vague origin but will never tend to the revenue, he said.

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