The Bulgarian parliament today approved in its first reading a bill to revoke the country's tax on Russian gas transit after Hungary threatened to veto the country's accession to the EU's Schengen area because of the levy.
The tax "should be waived" until the EU introduces explicit regulations on how to determine if gas is of Russian origin, according to the bill, which still needs to be approved in a second reading and then signed by the president to become law. Bulgaria's coalition parties agreed to suspend the levy last week, but adopting the plan in parliament became urgent after Hungary gave Sofia an ultimatum.
"We have made it clear to the Bulgarians that if the tax is maintained, we will veto their Schengen membership," Hungarian foreign minister Peter Szijjarto said on 16 December. "And since the decision on this will be made next week, they suddenly started trying hard to abolish this law." Budapest will not veto if Sofia withdraws the tax, "but first we want to see the Bulgarians actually repeal this law", Szijjarto said.
Bulgaria adopted the original law — which introduced a tax of 20 lev/MWh, or roughly €10/MWh, on the import and transit of gas originating in Russia — on 13 October. Hungary — along with Serbia and North Macedonia — repeatedly called on Sofia to abolish the levy, arguing that it endangers Russian gas supply to the region.
"The problem with Hungary will end as soon as we abolish the tax on Russian gas," Bulgarian prime minister Nikolai Denkov said on 17 December, according to state-owned news agency BTA. He said Sofia had preliminary talks with Budapest and pledged to abolish the tax on 15 December, but missed this deadline after protests by opposition parties disrupted the parliament's sessions.
Joining the Schengen free-travel zone has long been a key priority for Bulgaria, an EU member state since 2007, but its accession was so far rejected, most recently in December last year.
