Former Finance Minister and current Chairman of the Fiscal Council Simeon Dyankov commented on the 2026 budget on bTV, quoted by novini.bg.
Dyankov is categorical that the state cannot keep the deficit within the 3% limit and will be forced to raise rates.
"I am not a supporter of raising VAT, but I claim that the budget cannot pass without raising rates. The government also recognizes it, because it is betting on raising social security contributions. But raising social security contributions is the worst idea and it will hit all companies", said Simeon Dyankov.
"What I'm saying is that if you have to collect additional revenue, at least don't do the worst thing", commented Dyankov
According to him, there is no way the state can continue to keep the hole in the treasury, since it does not cut spending and the only options are raising revenue or increasing the deficit and debt. In the three-year budget forecast, the government set a growth in pension contributions of 3% for 2026 and 2% for 2027.
“In previous years, we used capital expenditures as a buffer, which were not implemented at the set levels. This year, too, there is currently no high implementation - there are still 8.5 billion leva left compared to the set target, but the government claims that it will implement the plan and will not use this money for a reserve”, commented Dyankov. If this happens, he is categorical that the deficit will go well above 3%. "Based on the data for July, a deficit of the order of 2014 can be expected, when we reached minus 5.4% of GDP", commented Dyankov.
According to him, the only hope for better budget implementation is the recovery and sustainability plan. Dyankov praised the government for working well on it. If the second and third payments arrive by the end of the year, as expected, this will have an impact on reducing the deficit”, commented Dyankov.
He described as puzzling the banks' agreement to pay corporate tax in advance, which is due in 2026, and suggested that this is done because of the danger of their excess profits being taxed.
This is the scarecrow that stands on the other side, commented Dyankov. The banks have paid 500 million leva in advance in tax, which they would owe next year, and this contributes to the better implementation of corporate tax revenues. Dividends from some state-owned companies are also paid in advance. However, this will open a hole in the revenues for 2026, Dyankov recalled.