site.btaFiscal Council Expresses Position on Parliamentary Groups' Proposed Revisions to Budget Extension Act

Bulgaria’s Fiscal Council Wednesday issued a statement to the media regarding the amendment proposals submitted by three parliamentary groups between the first and second readings of the 2025 Budget Extension Act. According to the Fiscal Council, the amendments proposed by GERB-UDF, MRF - New Beginning, and BSP - United Left, which concern municipal public finances, are reasonable and create a more predictable and clear financial environment for local authorities to operate in. The texts are essentially similar to those of the 2023 Extension Budget Act, the institution believes.

The Fiscal Council has a negative opinion on the proposal submitted by representatives of GERB-UDF, which calls for an increase in the coverage of state guarantees for agricultural projects (under the Strategic Plan for the Development of Agriculture and Rural Areas of the Republic of Bulgaria 2023-2027), issued by the National Guarantee Fund and the Bulgarian Development Bank, from 50% to 80%. According to the institution, this proposal should not be included in a budget extension act because it concerns a permanent change rather than a one-time decision. The financing of agricultural projects essentially becomes state-funded, which is not justified in a market economy, the statement reads.

The Fiscal Council supposts GERB-UDF's proposal that provides for the ratification of a new loan to Bulgargaz amounting to nearly EUR 92 million. The loan is aimed at expanding the gas transmission infrastructure of Bulgartransgaz in connection with the Vertical Gas Corridor initiative of Bulgaria, Greece, Romania, Hungary, Slovakia, Ukraine, and Moldova. According to the Fiscal Council, the Vertical Gas Corridor is a strategic initiative of the Bulgarian state and the EU that expands, deepens, and diversifies the gas market and, as such, brings significant benefits to Bulgaria, the other aforementioned countries, and the EU as a whole.

The Fiscal Council also supports the proposal submitted by Continue the Change - Democratic Bulgaria to extend the payment period for family allowances under the Family Allowances for Children Act from June 30, 2026, to December 31, 2026. This is a technical proposal aimed at giving the Social Assistance Agency the necessary time to print the new vouchers in euro in accordance with the future regular budget, the Fiscal Council explains.

The Fiscal Council does not support the proposals submitted by There Is Such a People, which provide for a reduction in the state subsidy per valid vote received, an increase in the tax on gambling activities to fund higher salaries for nurses and healthcare workers, compensation for businesses for transportation costs, and raising the VAT registration threshold. The same opinion is expressed regarding the proposal to set the ceiling for cash payments at EUR 10,000, whereas at the end of 2025 it was BGN 10,000. The likelihood that this proposal is ill-conceived, will harm businesses, and impose significant burdens on public finances is high, as in this specific case there are no financial estimates for the proposed measures, the institution notes.

The Fiscal Council also does no support the MRF - New Beginning group's proposal to grant a subsidy of EUR 6.5 million to the Energy and Water Regulatory Commission (EWRC) for the purpose of auditing electricity operators and conducting expert assessments of electricity and gas metering devices. This technical proposal is innovative, and the subsidy is essentially aimed at the companies’ clients to encourage them to request audits, the institution notes, adding that, at the same time, the subsidy places a burden on the budget, which is why it does not have the support of the Fiscal Council. 

Another proposal submitted by MRF - New Beginning, which provides for comprehensive electronic data exchange between the National Revenue Agency (NRA) and commercial banks, is supported by the Fiscal Council. It is envisaged that banks will provide information once a week regarding customer accounts held with them, as well as regarding POS terminals. Banks receive tax and social security information from the NRA regarding insured persons for the purposes of their creditworthiness assessments. The proposed electronic exchange will facilitate the NRA’s collection of tax revenues and the banks’ creditworthiness assessments, so the Fiscal Council supports this proposal.

Later on Wednesday, the Bulgarian Parliament passed the 2025 Budget Extension Act on second reading.