The EC said 2 weeks ago, "your tax system is unfair, it creates regression". Once the EC has introduced it, it says it every quarter and if we do not take measures, it will give it to us as an imbalance, said in an interview with the Bulgarian National Radio Lyuboslav Kostov, chief economist of the CTU and director of the Institute for Social and Trade Union Research.
"The entire business community, without exception, repeated that we should not touch the tax system until the country enters the eurozone and Schengen. We are the only country with a proportional taxation system without a taxable minimum. And the flat tax is written for income, profit tax is progressive throughout the world. A cleaning lady as a tax and social security burden pays more for her income than an IT specialist with a 5,000 euro salary. Unfortunately, many people do not understand it and do not want to admit it. If we are to be honest, this is not a budget that is entirely realistic, because we have overestimated expenses," Kostov said on the show "Nedelya 150".
And he explained why the unions are not satisfied with the draft budget for 2026:
"We are approaching it a little more pragmatically. We do not like two things in particular. First of all, the fact that there are 10% cuts everywhere. We had agreed to have an analysis, by ministries, by primary spending units. In some places, such as the National Revenue Agency, for example, there is a need for additional people to collect revenue. There are no people willing to work for a salary of 1,100 euros for tax inspectors. In other places, there is an inflated staff that is used to pay the VMS, there are vacant positions - people of retirement age, where layoffs are needed. However, the instruction that was lowered is 10% everywhere without analysis.
And the second is that civil servants should pay their own social security contributions, half of the social security contributions. It is good if they do this, but they must compensate for the lost real income. Their salaries are now being reduced by 7% with social security contributions and the budget's payroll costs are being increased by 7% on paper, only that this 7% growth includes the 5% that was given at the beginning of the year, in the extension law to compensate for inflation. Accordingly, now we are at zero without compensating for inflation, which is not even 5%, at least now it is 6, and by the end of the year we will go above 7%. And if you take a worker with a gross salary of 1,000 euros, he will receive an average of 21 euros per month, which will be less this fall compared to the spring. So they compensate him by December 2025, not by the current state. "
According to Lyuboslav Kostov, if civil servants are going to be equalized with the rest in the public sector, let the Civil Servant Act fall, "since it prohibits working a second job and accruing "class of time served" and KTD".
"This is what we don't want, we don't like these things", said the chief economist of the CITUB.
And he recalled that the protest tomorrow is organized by the CITUB and the KT "Podkrepa", the federations of civil servants, and the demand is:
"If they are going to make this reform, they should give them back all their rights – "class of service" and KTD, and let them work on a second employment contract. The cuts are not the result of an analysis, but 10% everywhere. The point is to look at the facts objectively."
And he recommended:
"A policy of incomes based on attestation should be made. A large part of the public sector has people from cultural institutions, including the Bulgarian National Radio, whose budget has been cut, and these people have not received more than 3% per year, and everyone is looking at the Ministry of Internal Affairs and the Ministry of Defense. There are civilians there who received a 10% salary increase and were sewn into those with epaulettes. Because of some bosses who take large salaries, the entire sector is stigmatized."