This budget is wasteful, non-reformist and misses opportunities to put state finances in order, which is what it needs.
This was told to the Bulgarian National Radio by Milen Velchev, Minister of Finance in the government of Simeon Saxe-Coburg-Gotha.
"This is not the only possible budget. The only option for a budget would be if we pretended that we landed from the Moon yesterday and everything that has happened in recent years is nailed down and bricked up - I mean those wrong decisions that were made in the last 3-4 years regarding the disproportionate increase in pensions, excessive generosity in the social sphere, unjustified, tying the growth of a large part of income in the budgetary sphere to arbitrarily chosen indicators, inconsistent with productivity growth. All this leads to today's situation, but it is not correct to say that there is nothing to be done. Many things can be done, including changing these legal provisions that tie the government's hands," he explained.
Every excessively generous budget is an attempt to buy peace of mind, the former Minister of Finance emphasized:
"If the government cares more about peace than clientelistic circles that want to continue to benefit from foreign money, they will surely insist on this budget policy. If they want to comply with the opinion of the productive part of the population, they should take note".
According to Velchev, in order for Budget 2026 to be reformist, the growth of spending on budget salaries and other income provided by the budget must be stopped:
"I am not advocating for a salary freeze. 5% is not much, but we are witnessing much higher percentages - 40, 70, followed by 20% growth in costs. 5% is sustainable growth and is still above inflation, but this must be combined with reforms and a reduction in employment in the budgetary sphere, because the population cannot decrease, taxpayers decrease, and the number of employees in the budgetary sphere grow".
He emphasized that unrealistic growths in some budgetary revenues are also set for 2026, as are also set in the current state budget.
In connection with the double increase in dividend tax from 5% to 10%, the former Finance Minister commented with an example:
"If you are an entrepreneur now and today your choice is whether to pay yourself a salary or fee, taxed at 10%, or to make a profit, which is also taxed at 10%, on top of which you pay a 5% dividend tax - you will probably choose the first. When in 2026 the choice is between paying 10% and now 20% - between profit tax and dividend tax - then the choice will be even more obvious. I expect even those who paid 5% today will find a way to avoid it next year.
If the majority can adopt such an important law as the one on the special governor in 30 seconds, I have no doubt that 30 minutes will be enough to adopt the state budget, Velchev also said.
"Whether we will reach a Romanian or Greek scenario depends on the patience of the voters and the persistence of the government", he pointed out.
"I do not see how the planned increase in the tax and social security burden of 2 percentage points, dividend tax and the excessive increase in the maximum social security income will be avoided. "All this burdens both businesses and those working in the private sector," Velchev further specified, emphasizing that if he were Minister of Finance now, he would not propose any increase in taxes, because they are already high enough and provide stable revenues to the budget:
"Collection at this tax burden is at a good level and provides sufficient revenues to the budget, the problem is how and how much is spent".