PROPERTY TAX IN BULGARIA – THE NEED FOR UPDATING THE TAX BASE

In recent years, local authorities in Bulgaria and the European Union member states have faced numerous challenges. The crisis related to the spread of COVID-19, the war conflict in Ukraine, high inflation rates, increased energy prices, and disrupted supply chains have significantly negatively impacted municipal budgets. The growth of local expenditures not only outpaces revenue growth but does so at significantly higher rates. The low elasticity of tax revenues prevents them from increasing in parallel with the expenditures. The inflation recorded in recent months further creates fiscal gaps at the municipal budget level. There are increasingly significant discrepancies between the revenue and expenditure sides of budgets, and some municipalities are exacerbating the problem of underfunded expenditures. Practitioners and academic experts are exploring ways to increase local government revenues and enhance the tax autonomy of municipalities in Bulgaria. Revenues from property taxes play a crucial role in increasing the tax independence and own-source revenues of local governments. The aim of this study is to analyze and assess the possibility of updating the tax assessment of real estate as a key prerequisite for the growth of local tax revenues.

DOI: https://doi.org/10.47743/rebs-2024-1-0007