In general terms there is an increase of confidence in companies registered in Bulgaria, according to BBSS Gallop International, and this is a sign of the institutional capacity to facilitate and speed-up reforms on the way to EU membership. Among the key factors in relation to this situation are the increases in minimum salaries, the increase in household incomes, the announced tax reforms, the improvements in the banking systems, which enables better and lower cost services, the state debt which decreased by almost 11 million euro in total and which amounted to 42.3% of the forecasted GDP.
According to the governments draft the 2005 budget offers opportunities to stimulate and improve the tax climate. The attraction of foreign investment will be achieved by incentives in the tax laws, Corporate tax is reduced from 19.5% to 15%, Tax on social and representative expenses is down from 20% to 17%, the tax on dividends is down from 15% to 7% and for EU entities is eliminated completely to avoid double taxation. The maximum depreciation rate for tax purposes on new machines and equipment increases from 30% to 50%.
The positive assessments given by the public in response to government policies undertaken influence the general environment on the way to EU membership, the reasons are twofold, 1st government institutions are working under less pressure regarding their positions leading up to elections, 2nd the Bulgarian people are showing confidence in the direction they are moving in.
