site.btaNormalized Budget Procedure Brings Tax Freedom Day Forward to May 13

This year, Tax Freedom Day in Bulgaria will be on May 13, the Institute for Market Economics (IME) says. Tax Freedom Day is the day when the people of a given country have earned enough money to pay their total tax bill for the year and, figuratively speaking, begin working "for themselves".

This means that Bulgarians will be working 134 days "for the government" in 2024, compared with 146 days in 2022. After two years of delayed adoption of the state budget and extended use of the previous year's budget scheme, Bulgaria is back on track as it has entered 2024 with a conclusively approved budget for the twelve months ahead.

The calculations are based on the consolidated public revenues forecast in the annual State Budget Act and take account of the large budget deficit in recent years. In 2024, the budget deficit is expected to amount to BGN 6.2 billion, which, in Tax Freedom Day terminology, means 11 days of working "for the government", assuming that all public expenditures are to be covered without incurring new government debt.

Although the state budget procedure has normalized (with an annual budget already adopted and rules established for key budget indices, including the minimum wage formula), fiscal policy remains among the principal challenges facing the government, the IME says. The institute recommends that the focus should be placed on making spending decisions result-oriented and containing the automatic increase of the expenditure side of the state budget in the absence of real progress in key public spheres. Attention should also be paid to budget sustainability and deficit contraction.