site.btaFinance Ministry Publishes Draft 2025 State Budget Act, Sets Deficit Target of 3%

The caretaker Finance Ministry published a draft 2025 State Budget Act with a deficit target of 3%. The bill, tabled by the caretaker cabinet, includes a number of measures on both the revenue and expenditure sides of the budget to keep the deficit level below the required threshold for euro membership.

The budget balance under the consolidated fiscal framework for 2025 is expected to be a deficit, amounting to 3% of GDP, within which expenditure policies, including their amendments based on decisions from 2024, are secured with corresponding revenue measures, the press release said.

Based on new debt financing assumptions, government debt is projected to reach BGN 59.8 billion (27.8 percent of GDP) in 2025.

The minimum amount of the fiscal buffers as of December 31, 2025, is envisaged to remain unchanged from the BGN 4.5 billion set in the 2024 State Budget Act.

The caretaker government proposes the following measures to raise revenue for the state budget:

- Introducing a mineral extraction tax;

- Introducing a new excise duty calendar for tobacco and tobacco products;

- Increasing the excise duty on alcohol;

- Increasing the excise duty on beer and beer produced by independent small breweries;

- Repealing the increase of the registration threshold from BGN 100,000 to BGN 166,000 as of January 1, 2025;

- Introducing one-off declaration of undeclared income – one-off tax of 15%;

- Introducing measures to reduce the share of the informal economy, combat tax fraud, tax evasion and tax avoidance, among others;

The Finance Ministry’s draft 2025 State Budget Act envisages to keep the 2024 levels of the national social security contributions to the Pension Fund, the contributions to the other funds of the social security system, as well as the ratios between insurers and insured persons.

The maximum social security income is to increase from BGN 3,750 to BGN 4,130 and the minimum wage is to be increased from BGN 933 to BGN 1,077.