Bulgaria’s Economy Ministry: Price of bread fell after zero-rating for VAT

Some retail chains in Bulgaria have reduced prices by 20 per cent of all types of bread in all cities where they have shops, the country’s Economy Ministry said on July 5, saying that this had been established by a check it had commissioned the Consumer Protection Commission (CPC) to conduct.

The ministry attributed this to the decision in the Budget revision, approved by Parliament on June 30, to zero-rate bread for VAT. The same decision also zero-rated flour for VAT.

The statement said that the CPC had carried out more than 100 checks in 30 cities in shops of various sizes between July 2 and 5.

“It is clear from the CPC protocols that some retail chains have reduced prices by 20 per cent on all types of bread in all cities where they have shops. This is not due to a promotion, as such is done only on certain goods for a few days. The current discount is for the entire assortment and it is permanent,” the Economy Ministry said.

The results of the inspections showed that in some smaller grocery shops, prices were close to or even lower than those in the chains, the ministry said.

“For example, in a grocery shop in Vratsa, 700g of white bread is sold for 1.40 leva, and 700g of typical bread for 1.30 leva. In Montana, in a small shop, 700g of white bread costs 1.60 leva, and Dobrudzha bread costs 1.50 leva”.

The statement quoted Economy Minister and Deputy Prime Minister Kornelia Ninova as saying: “Apparently, the removal of VAT on bread is starting to pay off.

“All attempts to challenge this measure or maliciously interpret it as a promotion have failed. There is no way that hundreds of shops across the country can simultaneously announce a promotion on all types of bread with the same discount,” Ninova said.

The Budget revision has been published in the State Gazette, bringing into effect the zero-rating for VAT of bread and flour.

A state scheme for a discount of 25 stotinki per litre of petrol also comes into effect, as of July 9.

However, it will be up to individual fuel chains and stations to decide whether to take part in the discount scheme.

According to a report by Bulgarian National Radio, major fuel station chains in Bulgaria have said that they were prepared to offer this discount to their customers, with the discount deducted after the car’s official document is shown. The scheme applies to individually-owned cars registered in Bulgaria and not to company or commercial vehicles.

(Photo: Frances Magee/freeimages.com)

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