site.btaFinance Minister: Budget Deficit Will Be 2.5% This Year

Finance Minister:  Budget Deficit Will Be 2.5%  This Year

Sofia, December 23 (BTA) - The budget deficit this year will be around 2.5-2.6 per cent of the GDP rather than the conservative 3.3 per cent set out in the national budget act, Finance Minister Vladislav Goranov said here Wednesday at what was the final news briefing for the outgoing year. "We are approaching an economic growth of 3 per cent for 2015 which is a psychological mark," Goranov said. He said that the priority of his Ministry next year will be the efficiency of public spending.

In the Minister's words a difficult debate is on about the role of the government in redistributing wealth. "The current model presupposed low taxation and weak redistribution role of the government but people make their own decisions about how to spend the money they make," he explained.

The head of the National Revenue Agency, Boyko Atanassov, said that tax compliance is 1.6 billion leva better this year than last year. The excise tax that has been collected is over 550 million leva more which is a growth of 12 per cent.
  
The government mandate started amid a difficult political situation and serious challenges in the financial system, the biggest being dealing with the aftermath of the Corpbank failure, the Finance Minister said. The year had a dynamic start with the deposit insurance fund paying out 3.25 billion leva to Corpbank depositors.
  
In the outgoing year the Finance Ministry sold on the international markets debt bonds with long maturity, taking advantage of relatively good trends on the international financial markets and achieving low income which showed, among other things, the confidence enjoyed by this Bulgarian government, Goranov commented.
  
"Unfortunately, the local elections [in October 2015] did not allow raising certain issues without moving the debate onto a political level," the Minister said adding that one such issue was a proposal to have 2 per cent of the personal income tax collected by municipalities.

He said that he will table changes in the public finance legislation to set in place a mechanism for financial recovery of municipalities. He added that in some municipalities the costs exceed revenues more than three times.