The general problem of Bulgaria and state finances is that expenses are growing faster than revenues and are getting out of control. This alarming observation was made by former Finance Minister Milen Velchev in the program "Supportive People" on Bulgaria ON AIR.
Velchev commented on the planned "Budget 2026", as well as the current situation with "Lukoil". According to him, the ruling majority is avoiding the necessary reforms out of political fear.
"Different budget options are possible, but in the current situation, the government is afraid of losing popularity if some unpopular measures to contain spending are adopted," said Milen Velchev, quoted by Bulgaria ON AIR.
The financier emphasized that the lack of will to limit spending is leading the country into a dangerous spiral of indebtedness and deficits.
Velchev's analysis placed particular emphasis on the continuous expansion of the public sector against the backdrop of the demographic crisis.
"The percentage of the budget or GDP that goes to wages is constantly growing. The number of people employed in the public sector is also growing, although the population as a whole is decreasing. "When it reaches an absurd limit - this means that one day we will all work for the public sector," the former minister warned.
Regarding the tax changes included in the draft budget, and in particular the increase in the "dividend" tax, Velchev expressed the opinion that the problem is not so much in the financial burden as in the message to business and investors.
"I personally do not think that the increase in the "dividend" tax is the biggest defect in this budget. I do not agree with the increase in any tax. But from 5% to 10% - this is not the pebble that will turn the car around," he commented.
According to him, however, this measure creates uncertainty for the future. "Unfortunately, this creates greater concern in terms of the signal it sends about the readiness of this ruling majority to increase other, more important taxes in the coming years", concluded Milen Velchev.
Source: www.dunavmost.com