Martin Dimitrov of Democratic Bulgaria called on the government to withdraw the 2027 Budget draft and rewrite it entirely. In an interview with Bulgaria ON AIR, the MP described the proposed parameters as a “recipe for disaster” and warned of the risk of higher inflation, new protests and an additional burden on citizens and businesses.
Dimitrov identified the budget deficit and the planned increase in government debt as the main problems. In the interview, he spoke of a deficit of 4.2% of GDP. However, the draft officially presented on 6 November envisages a deficit of 3.5% of GDP, or nearly €5 billion. The discrepancy is between the figure cited by the MP and the parameter announced by the Ministry of Finance and distributed by the Bulgarian News Agency.
The planned new government debt for 2027 is up to €8.6 billion. According to the proposed parameters, the maximum level of debt at the end of the year could reach €44.4 billion. The government says its aim is to reduce the deficit to 3% of GDP by 2029, while Dimitrov describes the planned borrowing as excessive.
Criticism of the Windfall Profits Tax
One of the most controversial measures is the one-off 33% tax on the windfall profits of companies in certain sectors. The Finance Ministry expects it to generate €800 million in revenue in 2027. Parliament approved the measure at first reading. It covers banks, insurers, telecommunications companies, currency exchange offices, payday lending companies and major food retailers.
Dimitrov said the tax could create an incentive for companies not to lower their prices, as a lower price could affect the calculated profit and the tax due. He also questioned why the energy sector was not included in the scope of the measure despite the increase in energy resource prices.
The draft also provides for the tax on benefits in kind to be increased to 7%. The maximum monthly value of food vouchers is proposed to be raised to €200, with amounts above the current limit of €102.26 becoming taxable. Dimitrov also criticised the planned changes to social security thresholds, toll charges and vignette fees.
Dispute over the Second Pension Pillar
The MP also reiterated his criticism of the proposed changes to the second pension pillar. In his words, this involves a risk of encroachment on personal pension savings, and he compared the way the issue was being discussed to the “Botaş” case. Dimitrov insisted that citizens should decide for themselves whether to transfer funds from private pension funds to the state public social security system.
There are conflicting positions on the issue. A document was published in the media indicating that the temporary redirection of part of pension contributions to the first pillar for the 2027–2029 period had been discussed. Konstantin Prodanov, chair of the Budget Committee, said that no change to the pension model or interference with the second pillar was being planned.
Dimitrov denied that Democratic Bulgaria was organising the expected protests and said: “With this budget, they are organising the protests themselves.” The draft is to be considered by Parliament under the statutory procedure, and the final parameters may change between the first and second readings.