The ban on the import of Ukrainian grain, which the now-departed caretaker cabinet requested from the European Commission, has currently caused damage to the treasury of 146 million leva in unpaid VAT, Finance Minister Assen Vassilev said on September 13.
A draft decision tabled in the National Assembly and on this week’s Order Paper says that Bulgaria does not support the extension of the Ukrainian import ban beyond September 15 2023, which allows wheat, rapeseed, sunflower, and corn to transit through Bulgaria, Poland, Hungary, Romania, and Slovakia, but bans the products’ availability on the countries’ domestic markets.
On September 13, Prime Minister Nikolai Denkov voiced the government’s support for the draft decision, which has the backing of the majority of We Continue the Change-Democratic Bulgaria, GERB-UDF and Movement for Rights and Freedoms MPs.
Vassilev told reporters: “By the end of the year, we expect the damages to be 40 million leva per month, if the trend continues.
“With this reckless decision, the caretaker cabinet deprived the treasury of revenue and made the entire Bulgarian people pay more expensive bread, more expensive flour, oil, feed, and hence higher prices for dairy and meat products,” he said.
“And all this to protect a sector that last year generated a profit of 2.5 billion leva.”
Vassilev said that the sensible policy is if there are producers who really would be facing difficulties and making losses, would be if there were targeted aid for these producers.
“But we should free up imports in order to generate revenue in the treasury and to eat cheaper food. This is the responsible decision for the benefit of all Bulgarian citizens “
Vassilev outlined the main financial and economic aspects of the debate for and against imports of Ukrainian grain.
“Revenue from grain production last year, when Ukrainian imports were allowed, was 9.976 billion leva. The profit on which taxes are paid for the grain production sector was 2.507 billion leva.
“For 2021, revenue was 7.965 billion leva, and the profit 1.862 billion leva.”
He said that the sector was the main beneficiary of a subsidy in line with the exemption of fuels from excise duty.
“This is 100 million leva of unpaid excise tax in the treasury of the sector. The subsidy to all agricultural users is 1.6 billion leva for 2021, and 1.96 billion leva in 2022,” he said.
Please support The Sofia Globe’s independent journalism by becoming a subscriber to our page on Patreon: