Example 45 : Setting up awater tax system in Bulgaria
Bulgaria hasmade lot of positive changes to its water policy over the last 20 years.
In particular, the implementation of the EuropeanWater Framework Directive (WFD) has
led to the creation of four River Basin authorities (River Basin Directorates).
These River Basin Directorates are responsible for implementing theWFD and in particular
developing a River BasinManagement Plan (RBMP) and Programmes of Measures. Bulgaria’s
current water tax system could still be expanded and revised. Based on the French experience,
the water fee system could have the following characteristics:
Simple:
themain structure of the system (calculation formula) should remain clear and
understandable (although the formula includes coefficients than could be detailed)
Progressive: one of themain challenges ismaking the economic sector accept to pay water
taxes. A good strategy is to create a progressive system starting with a fairlymoderate level
of taxes;
Fair:
the way that taxes are calculated should be equal within each economic sector and the
level of tax should reflect the use of water or the pollution emitted and its evolution;
Incentivizing:
the system should be designed so that the tax provides an incentive to use water
rationally and decrease water pollution; taxes should not only collect revenue, they should also
act as a powerful driver to change behaviour;
Cost-efficient:
the cost of managing the water tax system should remain limited, in particular
compared to the revenues generated by the taxes.
The different fees should be voted at national level with aminimum andmaximum for each
category of fee and devised at River Basin Level by the Basin Committee. Several threshold
values per parameter are also needed at national level. These values determine the payment
threshold of pollution per parameter.
The total amount of fees collected by the Basin agency should feed into the basin’s budget
and be used to develop and implement the programme of measures linked to the basin
management plan.
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THEHANDBOOK FORMANAGEMENT
ANDRESTORATIONOF AQUATIC ECOSYSTEMS INRIVERAND LAKE BASINS
7 ECONOMICAND FINANCIAL ASPECTS
