Tax Neutrality and Tax Expenses in the Practice of Bulgaria

A dialectic approach to the principles of tax neutrality is presented as opposed to the tax expenses – under the specific conditions of the transition period in Bulgaria up to now. Four main revenue sources are considered: personal income tax, corporate income tax, VAT and the aligned excise duties and the compulsory insurance contributions. The country's characteristic features are focused in view of the general theoretical requirements, such as the currency board, the privatization and the introduced individual income tax of the “flat” type, as well as the EU membership of Bulgaria. Some calculations and international comparisons are offered. Proposals are made on the improvement of the Bulgarian practice with generalizing conclusions.