site.btaTrade Unions Propose Raising Tax Relief for Working Families with Children

The Confederation of Independent Trade Unions in Bulgaria (CITUB) has called for a significant increase in the amount of tax relief available to working families with children, allowing both parents to benefit simultaneously up to the full relief amount. These proposals were presented by the union during a conference on Tuesday titled: “Time for a Review: How Has This Tax System Served Us So Far?”

It is proposed that the tax relief for one child be raised to BGN 1,200 (currently BGN 600); for two children – BGN 1,800 (currently BGN 1,200); and for three or more children – BGN 2,400 (currently BGN 1,800).

A key demand of CITUB remains the introduction of a non-taxable minimum for individual incomes equal to the minimum wage, as well as increasing the flat tax rate from 10% to 15%. However, the union acknowledges that implementing this at present would be challenging. “Considering the challenges facing the 2026 budget framework, its implementation is currently difficult to achieve,” their statement reads.

Increasing the corporate tax from 10% to 15% is another proposal put forward by the confederation.

CITUB President Plamen Dimitrov also highlighted the proposal to introduce a so-called digital tax. He stated that this “will not perform miracles”, as it primarily affects large multinational companies, but noted that it is already in effect in 12 countries and has proven effective.

Taxing windfall profits under existing European Union regulations for the financial and gambling sectors is another suggestion. CITUB pointed out that this policy is applied in several EU countries, including Spain, Italy, the Czech Republic, Lithuania, Hungary, Slovakia, and Latvia.

CITUB also proposes an annual increase in the maximum contributory income, to BGN 4,625 for 2026. Raising the contribution rate in the first pillar of the social security system by two percentage points is another demand. CITUB acknowledges that this is an unpopular and difficult measure, but considers it necessary “in view of the growing shortfall in the social security system.”

A key demand of CITUB is a 10% increase in personnel expenditure, with differentiation depending on which sectors were underfunded in 2025.

Plamen Dimitrov commented that while a sustainable fiscal policy is necessary, funds must also be secured for wage growth. He emphasised the need for improving the tax model.