Last month Bulgarian lawmakers voted to amend a tax law allowing for a waiver of the value-added tax (VAT) on food that companies donate to food banks and other charities. This provides significant savings and is a major incentive for businesses looking to help Bulgarians in need and to reduce food waste in the country. Currently, 20% of Bulgaria’s population is food insecure while 670,000 tons of food in the country goes to waste.
“This policy reform removes one of the most significant barriers to capturing food that would otherwise go to waste and re-directing it to those in need,” said Lisa Moon, President & CEO of The Global FoodBanking Network. “With 1 in 5 Bulgarians facing hunger, food rescue plays an invaluable role in improving food access and promoting social inclusion.”
Bulgarian Food Bank, a GFN Member, worked tirelessly over the last three years to educate lawmakers on the challenges VAT presented to companies and food banks. Before the amendment of the law, companies faced a 20% VAT on food donations, which made throwing away food more cost-effective than redirecting it to food banks. For the food bank, VAT impacted the number of food donations it received, thus limiting its ability to help more people.
GFN helped the leadership of Bulgarian Food Bank understand the various approaches to tax-related issues in food banking when the food bank was initially being established. On several visits to the country, GFN representatives met with members of Bulgaria’s National Assembly and the Council of Ministers to suggest legislative initiatives that would advance the development and work of food banks. GFN was also able to connect Bulgarian Food Bank with Ambassador Tony Hall of the US Alliance to End Hunger. Ambassador Hall was able to work with his contacts within the Bulgarian government to further promote the legislative amendment.
The result is a decision that can be considered a win for companies, food banks and, most importantly, Bulgarians suffering from food insecurity.