Introducing a tax on revenues rather than profits of the mining industry is the apogee of managerial and intellectual failure. This is what analyst and expert Iliyan Vassilev wrote in his commentary on the topic on the social network Facebook. According to him, it is about an additional levy of 15% on concession payments. He further shared:
„Introducing a tax on revenues rather than profits of the mining industry is the apogee of managerial and intellectual failure. We are talking about a 15% surtax imposed on concession payments. After a period of deindustrialization that was presented as part of the ‘green transition’ – the idea of reducing energy consumption by limiting industrial production to the level of energy security that green technologies can provide.
Bulgaria is left with a few economically sustainable sectors, among which the mining industry is key. Because, no matter how much we digitalize and virtualize, without a strong industrial base, we are doomed to economic instability. Like a tree without roots. The IT sector will not be able to function without resources and without the mining industry.
The European Union’s policy further worsened the situation by encouraging the relocation of polluting industries to China to show progress in the continent’s green transition. However, now China, which plays a key role in the global economy, including in the extraction of rare metals and drone production, is starting to implement counter-sanctions in response to higher tariffs from the EU and the US.
Тhis will soon unfold as a perspective, with Europe and Bulgaria needing to position themselves in the battle for energy and raw material security. This leads to new trends such as reshoring (bringing production back to home countries) and inshoring (relocating production closer to the final market), where raw material security plays a central role.
Against this backdrop, the introduction of „Stalinist sequestration“ on the revenues of the mining industry appears to be a strategic mistake by officials who have no understanding of strategic planning and risk-benefit analysis. The development of new deposits of valuable raw materials, including oil and gas in offshore areas, is yet to come.
Mining companies operate in an extremely competitive environment and create real economic value, while other sectors – such as banking – generate excessive profits without making a significant contribution to the economy, often through fees and spreads between deposit and loan interest rates. I’m not saying that over-taxation there is a good solution, but the difference between the banking sector and the mining industry is like night and day in terms of primary, raw material-driven added value.
Instead of addressing these issues or the inflated budgets of state institutions, the government chooses the easy way out – taxing businesses that generate real Gross Domestic Product (GDP). This happens under a caretaker government, where the lack of political accountability intensifies the sense of chaos and impunity.
Finally, let no one think that these decisions are coordinated with Peevski and Borissov. God forbid!“
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