Representatives from all business sectors have cautioned that the hike in the value-added tax in Bulgaria should be a last-ditch measure that should only be introduced together with an overhaul in government expenditure. The government should not increase taxes, but streamline expenses and improve the quality of the services offered, the financial directors of majors like IBM, United Bulgarian Bank, UniCredit Bulbank and mobile operator Vivacom recommended at the first press conference of the “Club of Financial Directors.” The club, established in December last year, brings together representatives of the largest companies in diverse sectors, such as telecommunications, banks, insurance, pension funds and manufacturers. "The measures, which the government offers, including an increase in taxes, are too painful,” Atanas Dobrev, Financial Director of Vivacom, commented, taking up a journalist question about the cabinet plans. “The trick is to improve the efficiency, since just a cut in expenses won't do the job,” he added, citing the experience of his company. In his words Bulgaria's high economic growth over the last few years came thanks to the inflow of foreign capitals and they remain crucial if the country aims for a higher than the average growth in the European Union. The “Club of Financial Directors” declared strong support for Bulgaria's accession to the eurozone and forecast that the adoption of the single currency will boost the flow of financial resources into the economy. Later in the day it emerged that Bulgaria's center-right government has dropped plans to increase the value-added tax by 2 percentage points to 22 percent. The cabinet planned to increase the value added tax to 22%, introduce a new tax on luxury goods and cut public servants wages in a bid to help fight the economic crisis and keep down the fiscal deficit. It was part of a package of new measures, which also include floating minority stakes in state-owned companies and a possible bond issue. The government is still expected to agree with the trade unions and the union of employers a final package of nearly 50 steps to combat the crisis.