Bread Prices Surge Across Bulgaria Following VAT Increase

Bread prices have risen sharply across Bulgaria after the reintroduction of the standard 20% value-added tax (VAT) on bread and flour on January 1, 2025. The tax had been set to zero during the pandemic to ease financial pressure on households, CE Report quotes BTA

In Stara Zagora, the price of a standard loaf of bread increased from BGN 1.30 to BGN 1.70, while in Kazanlak, it rose from BGN 1.39 to BGN 1.69—a 20% hike reflecting the VAT change. Local producers cite additional factors such as higher water, electricity, and wage costs as contributing to the surge.

Retailers across other regions, including Pernik, Montana, and Lovech, report similar increases. Small bakeries are struggling to absorb the costs, with some opting for partial price adjustments to avoid deterring customers.

Despite the price hikes, bread remains a staple, and consumers, though unhappy, continue to buy it. However, the increases are particularly challenging for larger households with low incomes. Producers warn that further price rises may be inevitable in the coming months due to escalating production costs.

The change has sparked discussions on VAT rates in Bulgaria compared to other countries, with calls for lower taxes on essential goods to ease the burden on consumers.