site.bta Finance Ministry Expects 2017 Budget Revenues to Top Lv 21.9 Bln

Finance Ministry Expects 2017 Budget Revenues to Top Lv 21.9 Bln

Sofia, October 26 (BTA) - The Bulgarian Finance Ministry released on Wednesday the draft for the country's budget for next year and the updated medium-term budget forecast for 2017-2019.

Real GDP is expected to slow down slightly to 2.5 per cent in 2017 before accelerating to 2.7 per cent in 2018-2019 with consumption and investment seen fueling domestic demand.

The Finance Ministry has budgeted a deficit equal to 1.4 per cent of GDP in 2017, 1.0 per cent in 2018 and 0.5 per cent in 2019.

Total budget revenues are projected at 21.9 billion leva, including 19.2 billion in tax revenues. Corporate tax revenue is seen at 1.97 billion leva with personal income tax revenues at 3 billion leva, VAT revenues at 8.8 billion leva and excise duty revenues at 5 billion leva.

Budget spending is projected at 11.3 billion leva next year with net transfers to the budgets of municipalities and institutions at 10.5 billion leva. Transfers to the judiciary will total 900 million leva while Parliament will get 500 million leva. Social security transfers will top 4.7 billion leva with health insurance transfers at 1.16 billion leva.

The total outlays under the consolidated fiscal programme over the medium term would drop from 39.8 per cent of GDP in 2017 to 38.2 per cent of GDP in 2019.

The Finance Ministry said the main goal in the 2017-2019 period will be pursuing a fiscal policy that would raise budget revenues while cutting the share of the informal sector. Low direct tax rates will be maintained with the burden being shifted to indirect taxation.

A rise in the minimum monthly wage to 460 leva has been budgeted to take effect from January 1, 2017 which will remain unchanged in 2018 and 2019.

In 2017 and 2018, the pension contributory rate will increase by one percentage point in a bid to ease the underfunding in the social security system. From 2017, the pension contributory rate under Article 69 of the Social Security Code will increase by 20 percentage points.   

The pension policy calls for gradually raising from January 1, 2017 the weight of one year of service in the pension calculation formula by a percentage equal or greater than the percentage set under Article 100 of the Social Security Code. For 2017, the percentage for every year of contributory service is 1.126. From January 1, 2017, the necessary contributory service for entitlement to pension is raised by two months per year until 35 years and eight months is reached for women and 38 years and eight months for men in 2019.

The priorities in the budget for next year are focused on measures to promote the development of the education sector, to maintain modern and combat-worthy armed forces and develop the defence capabilities of the country, to improve the operation of the health care system and to  implement the national programme for energy efficiency of multi-family residential buildings, the Finance Ministry said.

No foreign debt is planned to be raised in 2017 under Bulgaria's global medium-term note programme.

The debt-to-GDP ratio in 2017-2019 is expected at around 25 per cent by the end of the period due to the country's improved budget position.