site.btaUPDATED GERB to Withdraw Dividend Tax, Reduce Pension Fund Contribution, Says Party Leader Borissov

GERB will back down from raising the dividend tax and from a 2-percentage-point increase in the contribution to the Pensions Fund, proposing a 1pp rise instead, and will abandon the planned rollout of sales management software in retail outlets, party leader Boyko Borissov told a briefing in Parliament on Friday.

"Consider this budget withdrawn. The Budget Committee did not meet yesterday [Thursday], and nothing will happen until we reach an agreement with the trade unions, employers, and the other parties,” Borissov said here on Friday.

On Thursday, Borissov said that he had asked the Prime Minister Rosen Zhelyazkov and Finance Minister Temenuzhka Petkova to withdraw the draft budget or find a legal mechanism to proceed, given that it has already passed first reading in the National Assembly. Later, GERB hosted a meeting with unions and employers, after which the President of the Podkrepa Confederation of Labour, Dimitar Manolov, announced that the budgets were not withdrawn but rather the procedure was suspended.

On Wednesday evening, thousands of people filled streets in downtown Sofia and the square known as the “Power Triangle”, where the new National Assembly building is flanked by the Presidency and the Council of Ministers, to protest the adoption of the 2026 budget bills. 

According to Borissov, there are three possible scenarios for the budget. The first is to withdraw it entirely and start the process anew. The second, is to reach an agreement with trade unions and employers. Borissov expressed confidence that this would be possible, noting that GERB is prepared to make concessions, including on the dividend tax and pension contributions. He added that all parties are expected to present their proposals by Tuesday, after which the Parliamentary Budget Committee would convene to finalize the legislation.

If no agreement is reached, a third option would involve submitting a bill for an “extended budget” to ensure pensions and salaries are paid from January 1. “I prefer a regular budget,” Borissov emphasized. He confirmed that GERB MPs will not vote for the already submitted budget. 

On why the Government previously claimed there was no alternative, Borissov said this only applied within the coalition. “It became clear that businesses and others did not agree with it,” he said, referring to the protests. 

Regarding the concession for the Bulgarian Sports Totalizator lottery, proposed in the draft budget, Borissov said that he is ready to forgo all concessions but highlighted that gambling turnover in Bulgaria this year reached BGN 44 billion, while the state-run operator earned just BGN 70 million. “The legally reported profit from gambling activities to the National Revenue Agency is BGN 2 billion, meaning that BGN 2 billion have been taken from the pockets of Bulgarians who gamble,” he said, questioning whether it would not be more reasonable to grant the concession to a private operator. 

Borissov did not deny tensions with the BSP - United Left over the budget, noting that disagreements have existed since the coalition’s inception. “Two right-wing parties and two far-left parties formed this coalition. It has been shaky from day one, yet it looks deceptively stable,” he said, adding that compromises were made but were rejected by employers and other stakeholders. He stressed the need to protect the interests of business while maintaining social obligations.