Restaurant Associations in Bulgaria Prepare for Nationwide Protest Over VAT Increase

All restaurant associations and their affiliates in Bulgaria are preparing for a national protest, scheduled for Wednesday, to express their opposition to the government's decision to raise the VAT rate on restaurant services from 9% to 20%. The protest will involve blocking dozens of road junctions and busy intersections in over 30 cities across the country, CE Report quotes BTA

The protest comes after repeated requests from the restaurant industry for dialogue with government representatives regarding the proposed tax changes. Industry leaders argue that increasing the VAT rate will lead to bankruptcies, foster the grey economy, and fail to generate the projected revenue outlined in the 2025 State Budget Bill.

The VAT reduction to 9% was initially introduced during the COVID-19 pandemic to support the sector. While the rate has already been reinstated to 20% for tourism services in July 2024, the increase for restaurants and catering services will take effect in January 2025. The Finance Ministry anticipates the VAT hike will generate an additional BGN 371.5 million in revenue for the state in 2025.

Industry representatives have warned that unless the VAT rate is returned to 9%, they will move forward with their protest plans.