site.btaBulgaria’s 2025 Draft Budget Sets Deficit Target at 3%

Bulgaria's draft budget for 2025 projects a 3% deficit, caretaker Minister of Finance Lyudmila Petkova said here Monday. She was speaking to the press after a meeting of the National Council for Tripartite Cooperation at the Council of Ministers here on Monday.

The submission of the draft state budget will be delayed, and it will be presented to the next, 51st Parliament, together with the tax law amendments, Petkova said.

A draft state budget has been discussed with social partners and the National Association of the Municipalities in the Republic of Bulgaria. Consultations with the parties making it into the next Parliament are yet to take place. Petkova expressed hope that the draft budget's parameters will be largely approved.

"We are not proposing changes to the rates in the main tax laws - the Value Added Tax Act, the Corporate Income Tax Act, and the Personal Income Tax Act," Petkova said.

The draft state budget includes a proposal to reinstate the 20% VAT rate on bread and restaurant services. The annual impact of this change is estimated at BGN 400 million, Petkova said.

She noted that the government cannot submit amendments to the National Recovery and Resilience Plan (NRRP) to the European Commission without approval by Parliament.

Petkova urged for a swift review of the proposed changes in Parliament, as the deadlines for the implementation of the projects under NRRP are becoming increasingly tight.

The social partners supported most of the changes in tax laws. Representatives of employer organizations expressed concerns about the quarterly reporting of data on long-term fixed assets and inventories, the obligation for transport companies to submit information to the Customs Agency, and the introduction of penalties for legal entities failing to declare tax information to the National Revenue Agency.

The Confederation of Independent Trade Unions in Bulgaria (CITUB) expressed support for changes to the tax laws but disagreed with the current philosophy of the tax and social security system in Bulgaria, which it sees as placing a heavier burden on poorer individuals. 

CITUB said that they have suggestions for tax reforms that could boost budget revenues by BGN 4.7 billion within a year. These suggestions involve increasing the corporate tax rate from 10% to 15% and introducing a tax on financial transactions.