09.08.2021
Vasil Karaivanov, economist, lecturer at the Faculty of Economics and Business Administration (FEBA) at Sofia University “St. Kliment Ohridski” and a member of the European League for Economic Cooperation, participated in the program "Referendum" on BNT1 on July 27.
The topic of the broadcast was directly related to the proposal for the increase of pensions and the expected effects from it. Regarding the arguments accompanying the proposal, Assistant Professor Karaivanov commented: “Taxes do not have to be raised if I have to answer the question directly in order to make the indexation and adjustment of pensions. There is no need to raise taxes in the upcoming years. Whether there are higher pensions and incomes in other countries due to higher business taxes, let's say we raise business taxes here as well - who will pay them? They will again be paid by end users and retirees. The ball will be in them again. Even in countries like Italy, for example, where the corporate tax is 30%, there are so many benefits for businesses that their effective rate goes down to 7-8% and is more effective than our effective rate of 10%", he added.
Assistant Professor Karaivanov shared: "Only one thing cannot change in the economy. This is happening in theory, in fact we cannot change just one and expect great changes. If the pension system changes, the tax and economic policy in general must change. Currently, our tax system is organized in such a way that 25% of the revenues in the country are from VAT. Also 25% are the revenues from social security and health insurance. Income tax forms 10%, on the other hand we have the corporate tax, which forms another 5%. We have excises from indirect taxes, which form 15%. We have a balance in our tax system. If we want to change the pension system, we will also have to change the model of our tax system, for example, we will have to have less VAT revenue, which will be offset by more personal tax revenue, which will lead to new problems".
You can follow the watch participation of Assistant Vasil Karaivanov in "Referendum" here.