The Confederation of Labor (CT) “Podkrepa“ announced proposals for “realistic and reasonable changes to the tax and social security system“. The goal is budget sustainability, the union stated in a published analysis of the consolidated fiscal program for 2026, prepared by the chief economist of CT “Podkrepa“ Atanas Katsarchev.
One of the proposals is to introduce a progressive income tax and a non-taxable minimum on the income of individuals. From CT “Podkrepa“ are also announced to stop the practice of taxing value-added exports from Bulgaria at a zero rate and not a penny should remain in the country.
The union will categorically not agree to increase VAT from 20% to 22%. Such a measure will further reduce the purchasing power of workers' incomes and will shift an additional burden on them. The increase in the VAT rate will increase the prices of goods and services and will lead to additional inflation, which will again have a detrimental effect on the household budget, the analysis states.
A gradual increase in the maximum social security income in three steps until reaching 8,500 leva, according to the provision of the Social Security Code, is another proposal of the union organization. Among the ideas is “expanding the insurance base, including income from capital, since taxing only income from labor with insurance contributions is a form of discrimination, since the insurance system in our country works on a solidarity principle“.
Regarding the specific revenue measures, the “Support“ Law proposes increasing the tax on dividends to 10%, in order to equalize income taxes.
The “Support“ Law insists on increasing the benefit for raising a child up to 2 years of age, as well as the cash benefit for raising a child up to 8 years of age by the father (adoptive parent) - equal to the minimum wage. They also propose increasing the amount of the lump sum benefit in the event of the death of an insured person with the growth of the average social security income.
An increase in the amount of social security contributions should not be allowed, but rather economic, social and financial solutions should be aimed at including people with high incomes and their public commitment to the principles of solidarity insurance, the analysis also says.
The “Podkrepa” coalition is proposing a 13.6% increase in wage costs in the budget sector.
The budget procedure is underway, Finance Minister Temenuzhka Petkova announced a few days ago on the sidelines of parliament in response to a question about the preparation of the draft budget for 2026. The draft budget must be submitted to the National Assembly by the end of October. I call for a little more patience, the minister said at the time.