We have only been in this government for two months, there is no way we have generated 18 billion leva in expenses, Finance Minister Temenuzhka Petkova told the MPs. Let's admit it and say - this is the effect of the last four years, she appealed.
In the plenary hall, the MPs are considering the state's budget plan for this year on second reading.
In response to the opposition's accusations of record spending, Petkova explained that the growth in expenses only for social and health insurance payments for 2025 compared to 2024 is 5,591,000,000 leva. And these are the effects of all the changes made in 2022, 2023 and 2024. On the other hand, she added, maintenance costs also increased by nearly 2 billion leva, and here are mainly expenses related to old obligations for unpaid payments from previous years of the regional, transport ministries, etc.
Regarding the debt, she explained that up to its limit, according to the State Budget Act, certain funds can be used by the Council of Ministers to increase the capital of state-owned commercial companies in the fields of energy, defense, security, agriculture, economic development, education. I believe that these are areas in which there is a need to support companies so that they can invest and make profits, the Minister of Finance indicated.
In connection with the planned increase in social security contributions, she explained that an increase is planned from January 1, 2027. by one percentage point, and from January 1, 2028 - by two percentage points. This is for the purpose of predictability for business and society, Petkova emphasized. According to her, pension expenses are 24 billion leva for this year, 12 billion leva of which are from transfers from the state budget to the State Social Security budget. So we need to look for some option for balance, because this percentage of the budget is constantly increasing, the Finance Minister believes.
In connection with criticism of the proposed large increase in salaries in the Ministry of Internal Affairs, Temenuzhka Petkova explained that they are determined on the basis of current legislation and affect the entire "Security" sector.
Regarding the planned reduction in the threshold for VAT registration from 166 thousand leva to 100 thousand leva commented that in the current situation, the Ministry of Finance believes that the measure would yield results in view of the ambitions regarding improving VAT collection.
Changes to the VAT Act have also been prepared, which transpose a European directive, which is in force since January 1, 2025. The Ministry of Finance has taken the necessary actions as quickly as possible, so that the changes to the law will be submitted immediately to the National Assembly, assured Petkova.
Regarding the so-called donation from business to the state, he explained that this is a tax incentive, which companies will be able to benefit from in the next three years if they make a contribution to the central budget.
The Minister of Finance took the floor after criticism from deputies about VAT, about the debt.
Martin Dimitrov from the PG "We continue the change - Democratic Bulgaria" (PP-DB) criticized the government's intention to reduce the threshold for VAT registration from 166,000 leva to 100,000 leva from April 1 this year, as this would reflect on small businesses. The tax authorities do not benefit from the higher threshold, the MP emphasized. Therefore, the PP-DB proposes to maintain the current threshold. At the same time, the government is not introducing a European directive that states that in cross-border trade between EU countries the threshold is 100,000 euros/200,000 leva, the MP said. The imbalance was also caused by the high rate of salary increases in the Ministry of Internal Affairs, Dimitrov pointed out, which is why the parliamentary group is proposing an increase of 19%, BTA reported.
The government plans, although not immediately – 2027-2028, raising the tax burden by 3%, which is a very heavy blow to the economy, to the potential for development and growth, the MP also pointed out. The PP-DB also insists on eliminating the envisaged possibility for businesses to donate funds for investments to the state, because in their opinion it will turn into racketeering on business. Next, the PP-DB proposes that the debt increase by 12 billion leva, and not by nearly 19 billion leva, as the cabinet proposes. Whoever does not start important reforms in the first year of his government will not start them at all, believes Martin Dimitrov. According to him, the idea of creating state shops is also not good. The PP-DB will support Bulgaria's entry into the eurozone, but no one can support such wasteful spending, the PP-DB representative concluded.
Myumyun Myumyun from the "Democracy, Rights and Freedoms"- MRF PG agreed in principle that the threshold for VAT registration should not be lowered. Such abrupt moves confuse the plans of many people who want to do business, he believes.