site.btaPodkrepa Union Says Employees Contribute 70% of Budget Revenues

The Podkrepa Confederation of Labour says that employees contribute nearly 70% of budget revenues as against 30% coming from businesses. The union has detailed its findings in an analysis headlined "Who Fills the Coffers?".

The trade union says value added tax (VAT) and excise duties are always paid by the end customer of goods and services. "Companies charge, collect and remit them as an agent of the state," Podkrepa said. The largest portion of revenues comes from social insurance contributions and VAT.

The union also comments that a gross wage of BGN 1,500 results in a take-home pay of BGN 1,164 after personal income tax and social insurance contributions are withheld.

When people buy goods and services or own property (a home and/or a car), they pay VAT, excise duties, local taxes, local fees and stamp duty tax, insurance premiums, fines and court fees, among others, not counting out-of-pocket expenses on health care. An additional 25-30% are collected in excise duties on fuel, alcohol and cigarettes. This brings the total burden on average incomes to around 50%, and can reach up to 60% for the lowest incomes. "Thus the net income is half of the gross wage, around BGN 750. In fact, employees work half the year for the state," the union said.

Podkrepa strongly objects to a VAT rate hike.

Podkrepa suggests that the imbalances can be reduced by changing the tax and social security system. The union' proposes a progressive income tax and a tax threshold equal to the minimum wage, as well as a gradual increase in the maximum contributory income to BGN 8,500.

The 2025 State Budget Bill proposes a maximum contributory income of BGN 4,130, up from BGN 3,750 now.