According to economists, taxes and insurance should not be touched, but it is necessary to reduce the costs of raising wages without structural reforms.
The recent years, filled with elections and electoral populism, have increased the spending of our national budgets on the principle of “Let’s milk the cow and slaughter it”. This was said by the economist Kuzman Iliev, who was in the morning studio of bTV together with Lyubomir Datsov and Lachezar Bogdanov.
Now the caretaker finance minister is thinking about how to raise revenue for next year: by raising taxes, raising insurance, taxing the excess profits of banks, increasing the gambling tax, etc.
According to Lachezar Bogdanov, the problem in optimizing the budget for next year it is not in the revenue part, as tax revenues grow every year by about 12%. According to the latest NSI data, we have an annual economic growth of 2.2%, which puts us in 4th place in the EU after Spain, Cyprus and Lithuania. Unemployment is low, inflation is down to 2%. But despite these low favorable values, Bulgaria has a problem and it is in the expenditure part. Various institutions insist on raising salaries – the Ministry of the Interior, the Ministry of Education and others.
Salaries must be frozen in the current situation of huge costs voted by the parties in the National Assembly. They can grow if the efficiency of production and work in general increases, leading to optimization of the workforce, they said. the economists.
The need to reduce costs also comes from the country’s reduced exports. One of the reasons for this is that our largest trading partner, Germany, is in recession.
Our recent research in the Construction sector has shown that salaries for qualified engineers and managers are growing there too. Remunerations for mechanics who work with construction equipment are also being raised. Even for the low qualified, they are promoted, and yet there is a shortage of people, Lachezar Bogdanov explained.
According to economists, it is necessary to have a structural change in the organization of work. If something required 100 people, employers should find a way to do it with 50, but those who remain in the private and public sectors should be motivated with higher wages.
We are going to raise the insurance by 3%, because half of the pensions come from the budget. We have a demographic ticking time bomb. There is talk of something very dangerous – nationalization of people’s private lots on the second pillar because of the huge deficit of 11 billion in the pension fund. Private pension funds have 25 billion in assets accumulated over years. Some politicians do not think of other solutions than to reach for this money, the interlocutors said with indignation. This idea is already circulating, but if it happens, it will be an extremely dangerous blow. The increase in insurance by 3% will take 70 to 120 BGN from workers and businesses for each person.
For an unknown reason, transit freight through Bulgaria is paid twice as cheaply as through Serbia, for unknown reasons. And then there was not enough money to repair the roads…, the interlocutors pointed out some of the budget leaks.
Regarding the taxation of banks’ excess profits, the commentators explained that there is an excess profit when, under some very preferential conditions, it has made super profits. This does not apply to banks in our country, as lending rates are lower than the main interest rate of the European Central Bank. By taking the profit like what happened in energy a year ago, how do you think as finance minister you are going to finance the debt you are going to put on the market, they asked.
We are the country in Europe that pays the most expensive electricity. Just a year ago we were in the Top 3 electricity exporters, and therefore it was hastily decided to support business by taxing energy profits. We are now net importers of electricity, and there are no excess profits in the energy companies to give to businesses. The price of electricity in Bulgaria is the highest in Europe, simply because the taps are closing.
The balance between revenues and expenditures of the state budget is broken. We call for a little more common sense to balance this situation. Because if things get even more tense, we will first forget about the Eurozone, the economists assumed.
According to them, with the current parliamentary crisis, the Law on the State Budget for 2025 it won’t be available until Christmas, and it will probably be another 5-6 months before that happens.
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