Zablyanov commented on the once again compromise with the neoliberal principles on which the state’s budgets are built in recent years, without taking into account the crisis moment in the economy, in finance and in the crisis in the main financial parameters caused by events outside Bulgaria, the growing inflation in Europe and the unexpected costs of the European institutions in this context.
It is unrealistic to bring the budget deficit down to 3% within a year – this would damage the economy mainly due to the lack of capital spending. That is why “LEVITSATA!” proposes measures to reduce it within two years, gradually, with the goal being that by January 1, 2025, Bulgaria will have a 3% deficit. Georgi Kadiev announced this to the media, stressing that entry into the Eurozone should not be mandatory for 2025. The measures proposed by “LEVITSATA!” are divided into three groups – to increase revenues, to reduce expenses and a proposal to increase expenses.
In the first group of measures – to increase revenues – Kadiev emphasized the lack of logic, given the expected average annual inflation, that the planned increase in VAT for this year, compared to last year, is only 6.5%. According to estimates, even without more collection, VAT revenue should rise by at least 10%, Kadiev said, adding that with better collection, the growth in VAT revenue should be even higher. In this sense, 800 million BGN more than the 16.35 billion BGN provided for in the budget are being invested in this group.
“THE LEFT!” proposes the introduction of a one-time excess profit tax for the banking, telecommunications, weapons, fuel sectors, as well as that of the food chains. The reason these sectors are named is that either there are monopolistic cartel agreements or, thanks to international conjuncture, they have excess profits. The idea is to apply the existing formula for the energy sector. As an example, Kadiev indicated that BGN 180 million revenue is expected from the excess profit tax only from the banking sector, and if the other sectors are added, this would lead to BGN 500 million more in the state treasury.
LEVITSATA! proposes the introduction of a progressive corporate tax in two rates – the normal 10% for companies in Bulgaria and a second rate for the so-called large enterprises from 15%. Additional revenue of around BGN 500 million is expected from this tax measure on the existing basis from 2021. There is also an increase in the implementation plan from excise tax revenues by BGN 150 million, as well as an increase in the personal income tax plan by BGN 100 million.
In the second group of measures – to reduce costs, a reduction of capital costs from BGN 10.5 billion to BGN 7.5 billion is foreseen, which saves BGN 3 billion in the state budget.
In the third group of measures – to increase costs – “THE LEFT!” proposes an increase in the minimum wage to BGN 850 from July 1, 2023 (additional expenditure for the budget of BGN 175 million, as well as additional payments for the energy poor, maternity , child support. The formation also offers a 10% salary increase in the budget sector. The proposals are in line with the planned growth of inflation.
Georgi Kadiev explained that with the proposals made in this way by “LEVITSATA!” the budget deficit will be reduced by BGN 3.75 million and it would be within 4.1% of an expected GDP of BGN 185 billion.
Maya Manolova commented that the burden of the crises today is fully borne by the working Bulgarians, whose wages are significantly lagging behind the growth of inflation. Against this background, corporations are significantly increasing their profits by 160 percent and more for the year 2022. Manolova also emphasized the lack of justice in taxation, which is why “LEFT!” considers the 2023 budget as an opportunity to restore justice. The formation’s proposal is also a change in the tax system to regulate the introduction of a non-taxable minimum up to the amount of the minimum wage, up to the average wage. Measures to limit the withdrawal of foreign debt for current expenses, which would ensure that the state budget will not suffer damage due to unreasonable spending, is also a proposal of the “LEFT!”.
Rumen Petkov noted that the debate on the state budget does not affect the debate on the bloated state administration and cited as an example the lack of will of the political parties to resolve the issue of the number of regional administrations – to date 28 outsourced units of the state administration. This should be adapted to the needs of the society and not to the interest of one or another ruling party, said Petkov and added that the proposals of the “LEFT!” will be discussed with the trade unions and non-governmental organizations.
Valery Zablyanov announced that the signing of an agreement between “THE LEFT!” and “Left View” Movement for common actions in Bulgarian politics and for building a strong and powerful left-wing political entity, which will be ready for local elections and for extraordinary parliamentary elections.
