Банкеръ Weekly

Briefs

PARLIAMENT GIVES GREEN LIGHT' FOR PLAMA REFINERY

The Plama refinery of Pleven made one more step to the possibility of resuming operations. After months of persuation, paid workers' manifestations, and exchnage of fire in the press, Parliament approved finally the Amendments to the Corporate Income Tax Act. The new article 16 in the law, known as the Plame case was the most discussed provision. After consultations that lasted several hours a provision was approved, which united the initial proposals of Dimitar Savov from the National Movement Simeon II and Mouravey Radev from the Union of Democratic Forces.It stipulates that the profit tax shall be ceded to companies, whose insolvency procedures have been terminated by a rehabilitation plan that has entered into effect. The point in question is refunding of hollow profit, resulting from the reschedulement of a bankrupt company's liabilities to its creditors. This provision, however, will be only valid while the rehabilitation plan is being implemented. This was also one of the conditions for the resumption of operations at the Pleven-based refinery. Plama was so far indebted to the budget by about BGL40MN from unrealized profit after rescheduling the refinery's liabilities.There were no much debates on the other artilces of the law. As it was projected, the profit tax for companies with a positive financial performance exceeding BGL50,000 was reduced to 15 per cent. The final tax on games of chance (which already include impulse telephones but exclude the sports totalizator and lotto), was fixed at 12% of the proceeds.The MPs voted small preferences for the municipalities where unemployment is 50% higher than the average rate for the country. The profit tax charged on firms in these population centres shall be reduced by the amount of the mandatory insurance contributions for newly-hired workers on labour contracts, paid by the companies. Practically, this means that the double size of the pension, health, and other insurances, paid by employers, will be acknowledged as expenditures.

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