The most reasonable thing is perhaps that the 2026 budget should simply freeze the existing situation by the end of the year and the big debate should be held for the next one, but why not for the next two and three years so that we have predictability of both the tax environment and the spending policy. This was commented on by senior economist from the Institute for Market Economics Lachezar Bogdanov in the “Interview in the News” on Nova TV.
Regarding the idea that civil servants should start paying their own personal insurance contributions, the expert pointed out that this achieves “easier comparability between the private sector and the state employee”.
He specified that for civil servants, insurance is currently paid from the budget, so there will actually be no significant difference who pays the amount. According to him, the government can make a plan for several years ahead, in which there will be a commitment to change the income of civil servants and at the same time a scheme for phased payment of insurance until it reaches what is in the private sector. Touching on the topic of the minimum wage, Bogdanov drew attention to the fact that there are people who do not actually work on a minimum wage, but are insured on such an official contract. Therefore, in part “the problem with the minimum wage is a problem of clarifying the economy in some industries, where there is obviously still undeclared work and undeclared income from employment”, the economist explained.
He added that there needs to be predictability and a mechanism tied to real economic indicators. It is also necessary to foresee “a kind of brake in the event of a possible future crisis”, so as not to end up in a situation where, in the event of a recession, the minimum wage is automatically raised according to a formula, which would lead to a further increase in unemployment.
In connection with the raising of the maximum social security threshold, the expert noted that this represents an indexation of the ceiling with the accumulation of wage growth and inflation in recent years. However, the discussion should also cover other areas, such as tax assessments, which we have been dealing with “practically since the end of the last century, the beginning of this century”, the senior economist pointed out.
He added that the real values of properties have risen many times, as have the expenses of municipalities, while taxes are lagging behind. Due to the low tax assessments “deals are concluded at extremely low prices, which again allows for the concealment of turnover”, he concluded Lachezar Bogdanov.