Public Lecture on The Flat Taxes and Flat Ideas

Flat Taxes and Flat Ideas was the topic of the public lecture delivered by Vladimir Karolev at the university. It was organized by the UNWE and Sofia Chamber of Commerce and Industry (SCCI). At the event attended the Rector Prof. D.Sc.(Econ.) Statty Stattev and Georgy Chernev, Chairman of the Management Board of SCCI.

Prof. Stattev opened the meeting and outlined that the cooperation between the UNWE and SCCI had successfully developed and as a result 10 joint events had been implemented so far. The process will become more intensive especially in the field of student internships and practice, featured the future development the Rector. Karolev is famous and very well positioned person in the public area, thus the lecturer was presented by Prof. Stattev.

Prof. Stattev is presenting Vladimir Karolev and Georgy Chernev (on the right next to him)

The opportunity to remove the flat tax is permanently commented in our country so we shouldn`t stop speaking about its advantages, outlined Chernev to audience in the Ceremonial Hall.

I am glad that I am at the university where I have started my education, outlined Karolev who determined his lecture as “more popular and less scientific” and the topic as “game of words” with the coded meaning “for and against the flat tax”. The economist commented with disagreement the opportunity for replacing the flat tax by the proportional one.

In the Ceremonial Hall

Karolev defined the proportional tax as more honest because everyone should pay so much tax as the others. About its advantages the lecturer mentioned that it is “transparent” and “easy for calculating” and saves expenses of tax administration. Karolev outlined that the flat tax had been applied in 37 countries in the world and according to his words “it is not an argument that there isn`t a flat tax in the large and rich countries”. The lecturer shared that it is expected “a Renaissance of the return of flat tax in the world”.

The economist reminded about 1997 determining it as the beginning of discussions on the adoption of flat tax in Bulgaria, its incorporation in 2008 and the results after it. Among them Karolev featured: serious growth of incomes from direct taxes; lightening up of the economy and reduction of tax frauds; contribution to the opening of new workplaces; economic growth and attraction of foreign investment; contribution to the growth of disposable income; contribution to the growth of savings and local investment.

The lecturer

Karolev commented also the issue of usefulness of flat tax as among the “damaging flat ideas” he systemized: the remove of flat tax, increase of direct taxes and reduction of indirect taxes, increase of corporation tax, increase of labour tax, etc.

Attendees at the public lecture

I know it sounds strange but the flat tax is more social because most people having high income stop searching for official or unofficial ways for reducing their taxes. One of the official ways, for example, is to register an offshore company. I will give you a specific example: if the proportional tax is incorporated I will immediately start paying myself the minimal salary and I will make a living from the dividends earned by my company. It is an absolutely legal way and I won`t be the only one. It will lead to the so called legal tax arbitrage.

The Rector and Karolev during the discussion

The lecture was followed by questions and discussion in which the participants commented their arguments “for” and “against” the flat tax.

The Rector Prof. Stattev awarded to Karolev a Certificate of Appreciation in recognition of his public lecture.