The draft law on the state budget of Bulgaria for 2026 was adopted in first reading by the Budget and Finance Committee of the National Assembly with 12 votes "for", 8 votes "against" and not a single vote "abstained", BTA reports.
The draft budget was presented by the Minister of Finance Temenuzhka Petkova.
In connection with the introduction of the euro from January 1, 2026, the information and documents on the budget procedure have been prepared in euros at the official exchange rate according to the Law on the Introduction of the Euro in the Republic of Bulgaria - 1.95583 leva for 1 euro.
The initially developed draft budget laws for 2026, which were approved by the Council of Ministers and submitted for consideration to the National Assembly in November this year, were withdrawn by Decision No. 839 of December 2, 2025 of the Council of Ministers.
The autumn macroeconomic forecast for the period, prepared by the Ministry of Finance (MoF), predicts the growth of economy to reach 2.7 percent in 2026.
The average annual inflation for 2026 is expected to be close to that in 2025 - 3.5 percent.
The size of the budget balance under the consolidated fiscal program (CFP), expressed as a share of GDP, during the forecast period 2026-2028 is a deficit of 3 percent of GDP in 2026, 2.8 percent of GDP in 2027 and 2.4 percent of GDP in 2028.
Based on the assumptions during the period 2026-2028, the government debt is projected to reach EUR 37.6 billion (31.3 percent of GDP) in 2026, EUR 43.5 billion (34.2 percent of GDP) in 2026, and EUR 45.1 billion (35.1 percent of GDP) in 2028, respectively. of GDP) in 2027 and EUR 49.0 billion (36.6 percent of GDP) in 2028.
In 2026, the maximum amount of new government debt that can be taken on is up to EUR 10.0 billion, including up to EUR 3.2 billion under the SAFE instrument to strengthen the European defence industry.
The minimum amount of the fiscal reserve as of December 31, 2026 is set at EUR 2.4 billion.
From January 1, 2026, the minimum social security income for self-insured persons is EUR 620.20. The maximum social security income for all insured persons is 2,300 euros for 2026.
The amount of revenues, grants and donations under the Consolidated Fiscal Program (CFP) is 50.402 billion euros in 2026, and the amount of total CFP expenditures is 54.051 billion euros.
According to the national rule from the Public Finance Act, expenditures amount to 40.1 percent of GDP for 2026. When applying the activated derogation clause with respect to increased defense spending, there is an effect that leads to a decrease in these expenditures below 40 percent.
When forecasting tax revenues, the following proposals for amendments to tax legislation were taken into account, as well as the continued operation of some measures:
- Expansion of the scope of goods with a high fiscal impact risk;
- Introduction of a tax relief in the Corporate Income Tax Act for carrying out research and development activities;
- Expansion of the system for electronic tracking of the movement of vehicles transporting goods with high fiscal risk;
- Continued effect of the new excise calendar for excise rates on tobacco and tobacco products introduced on May 1, 2025, with the aim of a balanced, phased increase in excise rates on tobacco and tobacco products;
- Continuation of the policy for using tax relief for children and children with disabilities in an increased amount in 2026;
- Providing the opportunity for a more favorable depreciation regime for tax purposes of electric cars;
- From January 1, 2026 It is envisaged to increase the variable part of the fee under Art. 30, para. 3 and 4 of the Gambling Act for licenses for organizing gambling games from 20 percent to 22 percent;
The main spending policies leading to an increase in the spending part of the budget are as follows:
- Increase in the amount of the minimum wage from January 1, 2026 from 550.67 euros to 620.20 euros.
- Update of pensions for work activity granted until December 31 of the previous year, as of July 1 of the relevant year under the so-called “Swiss rule";, with the increase expected to be in the period 7-8 percent;
- Increase in the amount of the benefit for raising a child up to 2 years of age from 398.81 euros to 460.17 euros for the entire period up to 2028 inclusive;
- Increase in the amount of the cash benefit for raising a child up to 8 years of age by the father (adoptive parent) from 398.81 euros to 460.17 euros for the entire period up to 2028 inclusive;
- Increase from 50 percent to 75 percent of the cash compensation for non-use of pregnancy and childbirth leave under Art. 50a of the Social Security Code, for non-use of leave for raising a child up to 2 years of age under Art. 54 of the Social Security Code and in case of non-use of leave upon adoption of a child up to 5 years of age under Art. 53d of the Social Security Code;
- Implementation of a general income policy by increasing personnel costs in the budgetary sphere for 2026 by 10 percent and eliminating the automatic mechanisms for determining the amount of remuneration in certain sectors, tied to the average salary;
- Preservation of the income policy for pedagogical specialists in the system of preschool and school education;
- Launch of a Program for Support of Resident Doctors with funds provided in the amount of 30.0 million euros for 2026;
- Funds in the budgets of municipalities have been increased as a result of the changed natural indicators in the sphere of activities delegated by the state in the fields of culture, social services, healthcare, etc. Budgetary relations with municipalities amount to 5.077 billion euros for 2026 compared to 4.563 billion euros for 2025, or a growth of 11.3 percent.
Policies and measures for cost optimization:
- For the period 2026-2028, the Council of Ministers and the mayors of municipalities, after review and assessment, shall optimize the total number of personnel of the executive administration under Art. 36-38 of the Administration Act in order to achieve a reduction in the total number by no less than 5,500 permanent positions, permanently vacant for more than six months, distributed proportionally for the period;
- In 2026, the amounts of the individual basic monthly salaries of the central and territorial bodies of the executive authority, as well as those specified in Art. 19, para. 4 of the Administration Act, single-person bodies and their deputies shall be determined in the amount of the last individual basic monthly salary determined as of December 31, 2025, unless otherwise provided by law. Changes in the individual salaries of these bodies after December 31, 2026 shall be determined within the framework of personnel costs and in accordance with the percentage increase in the salaries of employees in the public sector.
- The funds for capital expenditures in 2026 amount to EUR 7.020 billion, including are those with national funding of 3.165 billion euros and with European funding of 3.855 billion euros (including NPLV).
Rumen Radev, Chairman of the Association of Industrial Capital in Bulgaria and rotating Chairman of the Association of Bulgarian Employers' Organizations (AOBR), pointed out that within the framework of the talks held between employers, unions and the government, measures such as raising the dividend tax, increasing social security contributions by 2 percentage points, and canceling the requirements for a SUPTO approved by the NRA were canceled. He added that the amount of the maximum social security income is also increasing by a slightly lower amount than initially planned. Radev expressed satisfaction with the program to reduce 5,500 vacant positions in the state administration over a period of 3 years.
Plamen Dimitrov, President of the Confederation of Independent Trade Unions in Bulgaria (CITUB), pointed out that finding a compromise in the talks on the draft budget was a challenge. According to him, in 2026 the CITUB will raise the issue of the need for a debate on Bulgaria's tax and social security system. He pointed out that the revenue part of the budget is tense and there is a risk that it will not be implemented in its intended version. Dimitrov stated that the budget does not finance salaries and pensions at the cost of a deficit, since the size of the deficit is tied to capital expenditures.
Silvia Georgieva from the National Association of Municipalities in the Republic of Bulgaria pointed out that there is a problem with the texts providing for the reduction of vacant positions in the state administration. According to her, the freedom of municipalities to determine the number of their employees, which they finance with their own revenues, cannot be taken away.
Georgieva said that there are about 28,000 full-time positions in municipalities, and there are usually several thousand positions that are not occupied, as these are highly qualified positions and it is difficult to find such personnel.
She drew attention to the fact that freezing the salaries of the executive branch at the 2025 levels could cause a problem with deputy mayors in the country, since their salaries are at the level of the minimum wage, which in turn increases in 2026.
Dobri Mitrev, Chairman of the Bulgarian Industrial Chamber, pointed out that this draft budget is not the best, but it is better than the withdrawn draft, since the tax and social security burden is not increased. He called for a debate to begin on the necessary reforms at the beginning of 2026, so that Bulgarian taxpayers are warned about what awaits them in 2027. According to him, difficult times await us and if we do not review how to increase spending now.
Boyan Nikolaev, Deputy Executive Director of KRIB, said that the organization supports the budget, since the sooner Bulgaria enters the eurozone without changing its tax system, the faster inflation will be controlled in our country.
Boris Bonev, Chairman of "Save Sofia" and municipal councilor in the Sofia Municipal Council, called on the deputies to consider the amount of the subsidy for public transport in Sofia, which is increasing by 8 million euros in 2026, which will not be enough. According to him, the amount of the subsidy should reach 83 million euros, which is an increase of 22 million euros compared to the set amount.
Vanya Grigorova, municipal councilor in the Sofia Municipal Council and chairwoman of the association “Solidar Bulgaria" also pointed out that Sofia needs serious funds for the repair and maintenance of its infrastructure.
Assen Vassilev from PP-DB criticized the planned growth of 3.3 billion euros in expected VAT revenues for 2026, pointing out that the forecast will not come true, and if the planned funds are not collected, the deficit will exceed 3 percent of GDP.
„The revenue part of the budget is overestimated, and in a way that is predictably wrong. Here we are talking about 1.5 billion euros, which will not be collected from VAT," he said.
Vassilev pointed out that the government has not given up on raising taxes and social security contributions, but has simply postponed its intention by one year.
According to him, the government is reducing spending on science, education and culture and freezing spending on healthcare, although they plan to increase taxes and social security contributions.
Martin Dimitrov from the PP-DB said that there is a serious decline in industry and exports, even though this is the year in which Bulgaria enters the land Schengen, which is extremely worrying. According to him, this is due to the government's measures aimed at business and citizens. According to him, in 2026 there is a risk that the budget deficit will exceed 5 percent of GDP. Dimitrov cited the Fiscal Council's assessment that the revenues set in the 2026 budget are overestimated.
According to Tsoncho Ganev from „Vazrazhdane", the country's membership in the eurozone is directly related to the intentions of the ruling party to raise taxes and social security contributions.
Krassimir Manov from MECH asked the ruling party why they removed from the draft budget the funds earmarked for the possible acquisition of „Lukoil Bulgaria", since this was the only meaningful measure in the withdrawn draft. According to him, if „Lukoil" is nationalized in our country, it will increase revenues in the budget.
Maria Ilieva from „Velichy" pointed out that the draft budget has overly optimistic revenues, mainly from indirect taxes.
Mehmed Salim stated that the “Alliance for Rights and Freedoms” will not support this budget because the second version of the draft was made in a hurry without taking into account all points of view.
The Minister of Finance Temenuzhka Petkova indicated with regard to the revenues set in the budget that the government is relying on the measures to increase collection, which are already yielding results this year, as well as on the new measures outlined in the draft budget. According to her, a possible restoration of the work of “Lukoil Bulgaria” next year will restore the revenues of the “Customs” Agency from VAT. She recalled that as a result of measures to increase collection, revenues this year increased by 8.6 billion euros by the end of October.
Petkova said that the government is looking for a way to use resources from the OP "Human Resources Development", through which to provide 100 million euros for the increase in salaries in primary health care, which includes nurses in our country.
Petkova said that a large part of the capital expenditures under the Recovery and Resilience Plan were transferred to 2025 and 2026, since nothing was done in the intervening years. Our country must implement the projects under the plan if it wants to receive payments under it, which is why the share of budget expenditures to GDP is at the level that has been set, namely 40.1 percent without the included funds from EU funds, as is the rule by law.