Parliament Approves Extension of Quota for Food Vouchers for 2021

An increase in the monthly non-taxable amount to BGN 200 and the quota for 2022 to BGN 1 billion is forthcoming.

On Friday, January 28, the Minister of Finance issued the first orders for quotas for food vouchers for 2022. This became possible after the National Assembly approved at second reading the extension of certain provisions of the 2021 budget, including the quota for food vouchers. In this way, employers will be able to provide their employees with food vouchers for January and February until the adoption of the 2022 budget.

The quota for food vouchers is determined in the State Budget at the beginning of each year. The Draft Budget for 2022 envisages the quota to increase to BGN 1 billion. In 2021 the quota was equal to BGN 390 million and was exhausted in November. The monthly non-taxable amount in the form of food vouchers is currently up to BGN 80 per employee and is expected to increase to BGN 200 in 2022.

The Minister of Finance announced a few days ago that food vouchers will also be able to pay household bills for electricity and water, thus the government will stimulate employers to provide additional funds to their employees in order to cover rising utility costs.

“Improving the food voucher system and increasing the non-taxable amount to levels comparable to European ones are a good way to fight the gray economy and brighten incomes. A number of our studies show that food vouchers increase local consumption, tax collection and brighten the economy by 15-20% of the quota, ” said Medi Benbugera, CEO of Edenred Bulgaria and chairman of the Bulgarian Association of The Food Vouchers. The users of food vouchers in Bulgaria are over 500,000 people every month, and this remains the most popular social benefit in Bulgaria and its benefits for purchasing power and welfare of workers is undeniable.

In connection with the frequent media coverage of the tax treatment of food vouchers – VAT on food vouchers will not change in 2022. And now food vouchers are subject to VAT when replacing the voucher with food and food products by the end user. Neither employers nor employees will pay extra VAT on the face value of food vouchers, as claimed in some media reports.