site.btaBulgaria's 2025 Budget: Finance Minister Sets Bold Revenue Targets, Tax Amnesty, and Eurozone Aspirations

The Ministry of Finance plans for State budget revenues in 2025 to reach BGN 92.485 billion. This marks an increase of BGN 20.243 billion compared to the expected revenues for 2024, said caretaker Minister of Finance Lyudmila Petkova during the first Question Time of the 51st National Assembly on Friday. Tax and social security revenues are set to rise by BGN 15.6 billion compared to 2024, Petkova added.

Rising Expenditures and Capital Investments

Expenditures in the draft budget for 2025 are estimated at BGN 98.9 billion, an increase of BGN 20.1 billion from 2024, primarily driven by higher salaries and pensions.

Capital expenditures will see an allocation of BGN 14.3 billion, reflecting a rise of BGN 4.3 billion. Of this amount, BGN 7.2 billion will come from EU programmes, while the remaining BGN 7.1 billion will be funded by the State budget.

Petkova outlined that ministries and agencies will receive BGN 3.4 billion, and municipalities will get BGN 1.15 billion, with additional funds raising the total allocation for municipalities to BGN 2.3 billion.

Managing Budget Surplus and Recovery Funds

Petkova said that any surplus revenue for 2024 exceeding the 3% GDP deficit will be used to support the 2025 budget. She stressed that BGN 75 billion in revenues are already earmarked in the budget, with tax and social security revenues expected to meet or exceed their targets. However, the budget accounts for a shortfall of EUR 1.5 billion due to delayed payments from the Recovery and Resilience Plan.

Financial Stability and Eurozone Readiness

The government is committed to maintaining financial stability, with the 2025 budget capped at a 3% deficit. Petkova acknowledged that Bulgaria has yet to meet all criteria for Eurozone accession. Once these requirements are fulfilled, the government plans to launch a nationwide information campaign about the euro.

National Debt Strategy and Economic Support

In response to questions from the far-right party Vazrazhdane regarding national debt, Petkova confirmed that a larger debt is planned for 2025. This debt will cover the budget deficit, refinance existing obligations, and increase the capital of key institutions like the Bulgarian Development Bank, which supports small and medium enterprises. Additionally, funds may be allocated to bolster the Bulgarian National Bank if necessary.

Tax Amnesty Measures to Support Businesses

Petkova introduced two tax amnesty measures to enhance budget revenues while alleviating financial burdens on businesses. The first amnesty targets declared but unpaid tax and social security contributions as of the end of 2024, waiving penalty interest for those who pay their principal debts. The Ministry of Finance’s analysis reveals that many companies have declared obligations since 2020 but have struggled to meet them. The measure aims to generate budget revenue while supporting businesses and municipalities, which also face financial challenges.

The second amnesty focuses on undeclared liabilities, though the revenue generated from this initiative is expected to be less significant. Both measures have been communicated to the European Commission and international institutions to ensure compliance with anti-terrorism financing and money laundering standards.

Avoiding Tax Rate Increases

Petkova concluded by underscoring that raising tax rates to boost budget revenues would negatively impact the economy.