site.btaTrade Union Calls for Changes to Bulgaria’s Tax Model

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

CITUB recommended raising the tax relief for one child to BGN 1,200 (from BGN 600), for two children to BGN 1,800 (from BGN 1,200), and for three or more children to BGN 2,400 (from BGN 1,800).

The confederation also reiterated the need to introduce a non-taxable minimum for individual incomes equivalent to the minimum wage and to increase the flat tax from 10% to 15%, though it acknowledged that implementation at present would be challenging. Increasing the corporate tax from 10% to 15% is another proposal.

CITUB President Plamen Dimitrov suggested introducing a digital tax targeting large multinational companies, which has proven effective elsewhere. The unions also proposed taxing windfall profits in the financial and gambling sectors under existing European Union regulations, following practices in other EU countries.

Further measures include raising the maximum annual contributory income to BGN 4,625 for 2026 and increasing the contribution rate in the first pillar of the social security system by two percentage points. CITUB also called for a 10% rise in personnel expenditure, adjusted according to sectoral funding needs in 2025.

Dimitrov stressed that while maintaining a sustainable fiscal policy is essential, it must be balanced with securing funds for wage growth and improving the overall tax model.

Speaking at the conference, Deputy Minister of Labour and Social Policy Gergana Aleksova noted that around 450,000 workers in Bulgaria are insured at the minimum wage, a figure the Ministry says reflects a high level of informal economic activity.

Aleksova stressed the importance of continuing the fight against the grey economy, warning that paying only the minimum social security contributions results in minimal pension entitlements. She added that while higher tax and social contribution revenues would bolster public finances, they could also reduce workers’ net incomes.

Parliament Deputy Chair Dragomir Stoynev, Floor Leader of BSP - United Left, told the conference that the Bulgarian Socialist Party (BSP) is prepared to reform the tax and social security system. Drawing on his experience from a BSP-led government that introduced the flat tax, Stoynev recalled that the party began discussions on the system three years ago and is ready to engage with current government partners. He warned that the flat tax is no longer sustainable and, while changes are not expected in 2026, the existing model is exhausted and unfair.