An

Deficit
Bugetar(%P.I.B
)

2016
1,9

2017
0,8

2018
0,4

2019
0,2

In the medium term, high reliance is placed on increasing government revenue in

nominal terms and limiting government expenditure. Fiscal consolidation, supported
by tax measures, is expected to lower deficit to 0.8% of GDP on an accrual basis in
2017 and by 2019 the budget balance will improve to -0.2% of GDP. In 2017,
consolidation will be driven mainly by cyclical factors, in particular through the
slightly increased inflow of funds from the European Union in the early phases of the
projects from the 20142020 programming period, which corresponds to the lower
real expenditure. According to the current forecasts, the expenditure of the General
Government sector, measured as a percentage of GDP, will decrease by 1.0 pp in
2017 compared to 2016 and will be accompanied by an increase in revenue (by 0.2
pp in 2017 compared to 2016), with the consolidation strategy remaining valid in
the medium term. As regards revenues, the government increases the excise duty
rates applied to tobacco products and continues the implementation of its
programme for changing the parameters of the pensions and social security policy.
In the medium term, the government intends to preserve taxation (as a percentage
of GDP) below its 2017 level and at the same time it plans to increase the social
security burden in 2017 and 2018. The budgetary forecast envisages reaching a
close to balanced budgetary position by the end of the forecast period (deficit under
ESA2010 at 0.2% of GDP in 2019), supported by positive outlooks for a sustainable
economic growth in the medium term which generates sufficient tax revenue and
creates prerequisites to decrease certain government expenditures.

Measures on the revenue side: The main priorities of the tax policy are aimed at
increasing budget revenues and continuing fight against smuggling; decreasing

costs for businesses and citizens; promoting the investment activity and
employment; continuing the measures for collecting overdue liabilities; measures
for lowering the administrative burden, improving the conditions for doing business
and attracting investors. The main regulatory characteristics and changes regarding
taxes include: Keeping corporate tax rates at low levels, the personal income tax
and VAT, as an important incentive for investment, economic growth and
employment. Measures to improve the collection of tax, social and health
insurance contributions by different mechanisms such as: enforcement measures
for overdue liabilities, stricter control on high fiscal risk goods, preventing tax
evasion, scheduled telephone campaigns, measures against the shadow economy
and against smuggling. The positive overall effect of the measure on revenues is
projected at BGN 84.0 million in 2016 (0.09 % of the projected GDP). Organising a
national lottery game with receipts, as a measure to improve the tax collection rate
and to address the shadow economy by promoting voluntary tax compliance. The
positive overall effect of the measure on revenues is estimated at BGN 12.1 million
in 2016 (0.01 % of the projected GDP). Increasing the excise duty rates for tobacco
products. This is a step laid down in the scheduled increase of the excise duty rates
to the minimum EU levels and this step-by-step process will continue in the years to
come. The positive overall effect on tax revenues is estimated at BGN 92.3 million
(0.1 % of the projected GDP). Increasing the excise duty rates for energy products
used as heating fuel. The positive effect on revenues from the increased excise duty
rates for energy products used as heating fuel is estimated at BGN 85.3 million (0.1
% of the projected GDP). The positive effect of the increased minimum wage on
tax revenues is estimated at about BGN 1.6 million (0.002 % of the projected GDP).
Decreasing the percentage deducted from the profits of companies with majority
state ownership as a dividend for the State to 50 % in 2016. This is aimed at
stabilising the financial condition of State-owned companies and enterprises and
increasing the disposable resources to be used for maintenance and investment.

The social security policy has the following parameters on the revenue
side: The amounts and ratios of the social security contributions to the Public
Social Security (PSS) funds and the health insurance contributions in 2016 remain
unchanged. A separate fund is set up for the employees in the Public order and
safety sector as of 1 January 2016 the Pensions for Persons under Article 69 of PSS
Fund. The differentiated minimum insurance income of self-insured persons based
on their taxable income remains unchanged in 2016, respectively at BGN 420, BGN
450, BGN 500 and BGN 550. The minimum monthly amount of the insurance income
for registered farmers and tobacco producers remains unchanged, at BGN 300.
The maximum insurance income for all insured persons remains unchanged, at BGN
2600 in 2016. Increasing the minimum thresholds for social security contributions
for the main economic activities and occupational groups on average by 8.6 % in
2016 against 2015, with estimated positive effect on revenue for PSS at about BGN

81.0 million (0.09 % of the projected GDP). A multiple choice option is envisaged
for the individuals born after 31 December 1959, provided that they are not granted
a pension for old age and length of service, to migrate 27 from the Universal
Pension Fund to the Pensions Fund of PSS or the Pensions for Persons under Article
69 Fund of PSS and vice versa. The positive effect on revenues is estimated at BGN
5 million (0.01 % of the projected GDP). An option for recalculating the pensions
with reduced individual coefficient granted before 31 December 2015 is introduced
for persons who by 31 December 2016 choose to transfer the funds on their
individual account in a Universal Pension Fund to the Pensions Fund of PSS. The
positive effect on revenues is estimated at BGN 116 million (0.13 % of the projected
GDP).

Pag 31

Bulgaria este una din tarile care in ultimele perioade a inregistrat cele mai
mari cresteri economice din Uniunea Europeana
Capitala
Suprafata
Popultie
PIB (2015)
Limba
Sistem politic
Stat membru U.E. din
Moneda

Sofia
110 370 km2
7 202 198
44,162 miliarde Eur
Bulgara
Republica parlamentara
1 ianurie 2007
Leva bulgareasca (BGN)