What the Ministry of Finance is trying to do is to strengthen the revenue side of the budget, i.e. new sources are being sought. The revenue measures will have a positive effect on the budget, but not as much as expected.
This opinion was expressed to the Bulgarian National Radio by Prof. Daniela Bobeva - a financier and university lecturer, former Deputy Prime Minister, regarding the proposals for changes in tax laws.
She added that the opposition's criticisms are mainly towards the expenditure side - to seek less spending.
In the program "Nedelya 150" the expert also commented on the proposals for a tax on excess profits:
"The discussion about what this tax is and whether it is a real tax or some form of solidarity began in 2022. The idea of having such taxes is totally anti-market, it is very risky for investments and for the development of the economy. I can't say anything good about this measure".
"The Council of Ministers is trying for the second time to add some additional revenue to the budget, supposedly once, but it will probably not be once. It is strange, however, that the business organizations that are affected - banks, insurers and others - have not yet expressed their arguments in this area," she emphasized.
Prof. Bobeva pointed out that banks and insurers - these are the most regulated sectors. According to her, all their profits are in the open, unlike other sectors. "Are banks profiting at the expense of consumers - that's the big question", she added and further noted:
"The question is why this is happening. Bulgaria is one of the countries with the lowest interest rates on loans. Why are banks making profits? They have made major investments in digitalization. Interest rates on deposits are lower because we are saving more. It is not justified why banks and insurers specifically. I don't think this will permanently fill the budget".
According to her, there is populism in this measure. According to her, we need something that will permanently fill the budget.
The financier emphasized that we have a big problem with social spending, which is financed from the budget. Their efficiency is very low, she specified and added that when such changes are introduced, there should be very strict control over whether and to what extent the money goes exactly where and for what it was allocated.
She highlighted good things in the Consumer Credit Act. They have proven to be quite breakthrough, there are also new ideas that can be included, Daniela Bobeva pointed out. According to her, this law is trying to introduce much stricter requirements, including for quick loan companies. She also linked them to gambling.
"With the entire package of laws, we have a double blow to gambling and the mass spread of gambling".
The Consumer Credit Agency will be obliged to provide advice to persons who are in financial difficulty and need financial advice, said Bobeva and expressed doubt, however, about the capacity of this institution in this regard. According to her, very strict control is needed.
"We have a problem with the control over compliance with the requirements of consumer legislation and in particular consumer credit".
She believes that gambling should be banned completely:
"Gambling here has reached unacceptable levels. We have allowed gambling to break up families. Unfortunately, now we cannot afford to completely ban gambling. It should be done gradually. 16 thousand are employed in the sector - we have a lot of employment and a lot of money".
According to her, much stricter measures are needed than banning advertising:
"Who will give up gambling, after they are already addicted, because advertising will be banned? Banning advertising - we are going into details that will have no real effect".
"We have let the genie out of the bottle. To get it back, a comprehensive reform is needed. It is good to start with advertising, with highlighting the income of these companies, but we must gradually move towards a total contraction of this sector in order to protect families and lives from what has been happening in recent years," Prof. Bobeva was categorical.
Regarding the measures to compensate for high fuel prices, the financier commented:
"These measures are very difficult to calculate, develop and their effect has not been proven. We have a lot of experience in compensation. Once you have given compensation, it is very difficult for those who use these compensations to give up, no matter how dissatisfied they are with their amount. The government must consider very carefully against the backdrop of what is coming in the oil markets, and they are very volatile. You cannot change and invent compensations every day. Some lasting solution to this problem must be sought, rather than moving to the compensation regime.
Changing prices does not produce a response from consumers, i.e. to reduce consumption, emphasized Daniela Bobeva. According to her, if consumers do not punish bad traders and producers, there is no way we can have a normal market.
"People expect someone to do something, they do not expect us to do something ourselves. This is folk psychology. The more we compensate, the less we have correct market feelings and our behavior is oriented towards them. We must learn from crises and behave responsibly with our finances, she reminded.