BULGARIAN GOVERNMENT APPROVES BUDGET REVISION, SETS DEFICIT AT 3,7% OF PROJECTED GDP

The financial problems of the country result from mistakes in planning of expected revenue, poor management of EU funds and some suspended EU funds, said Finance Minister, Vladislav Goranov after the meeting of the Council of Ministers on 11th of November, at which Bulgaria’s new government approved the update for this year’s budget.

Goranov said that the expected underperformance in VAT for the year was 670 million BGN and 318 million BGN of uncollected revenue from excise duties.

Forecasts project almost 79 million BGN less revenues from corporate tax.

After the revision of the budget, its net increase is expected to be by 278 million BGN. The deficit is projected to reach 2,676 billion BGN plus additional expenditures for the budget of the National Health Insurance Fund and provision of funds for unplanned deficit of EU financing related to the budget of the national fund.

Based on these projections, the overall deficit under the consolidated fiscal programme is expected to rise to a little less than 3 billion BGN or 3,7% of the projected GDP.

It is possible that an excessive deficit procedure is initiated against Bulgaria.

In addition to the draft budget update, the Council of Ministers also approved proposed amendments to the tax legislation, including a gradual increase of excise duty on tobacco products by 2018, starting from 2016. Another amendment refers to the taxation of telecommunication service providers which deliver services to other countries, outside Bulgaria.

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