"The growth of salaries in the public sector must be limited, as this is over 23 billion BGN every year. We are taking on debt to cope, but in any case the reduction in expenditure must be more radical", the executive director of the Union for Business Initiative, Mihail Krastev, told Nova TV, quoted by novini.bg.
Finance expert Levon Hampartsumyan pointed out that in any case we have low debt, but it is important what it is used for. “This money is being wasted”, the financier added, emphasizing that the funds are being spent on salaries in the public sector, inefficient projects, and not, for example, on infrastructure, investments that would guarantee income, etc.
Krastev explained that revenues are high enough, even record-breaking every year, and there is no need to increase the tax burden. He asked if the property tax were to increase, what would the revenues be from this and which problem exactly would be solved. In his words, the idea of increasing VAT by 2% will also not solve the problem with the expenditure part, “which is too inflated”.
”Salaries in the budget sector cannot be 10% of GDP. Pensions cannot have increased with such a high base, we have broken the Swiss rule”, added Krastev.
In his words, the economy is growing, but we must abandon some practices such as increasing the minimum wage “according to this absurd formula that does not meet any criteria”. He asked what an average wage means, where more than 75% of people in the country earn below its level.
Hampartzumyan emphasized that in the public sector there are salaries that are higher than those in the private sector. He was categorical that before raising taxes, we need to make the systems efficient.
Krastev said that it is not true that taxes in Bulgaria are not being raised and gave an example of increasing the maximum social security income. In his words, this is not fair, since unemployment insurance has been frozen for five years. “We will receive less money than we have paid”, he added.
Hampartsumyan commented that the long-term accumulation of budget deficits ultimately leads to a catastrophe.