site.btaIndustrial Capital Association Urges Target Deficit Under 3% in 2026 Budget, Maintaining Current Tax System

The target of Budget 2026 should be a budget deficit lower than or equal to 2.9%, with a clear goal of consolidation and achieving a deficit below 2% in 2027, the Bulgarian Industrial Capital Association (BICA) said in a statement Friday. "At the same time, budget revenues and expenditures should be planned realistically, with fiscal buffers provided for the automatic reduction of non-priority spending in the event of revenue shortfalls or delays in European payments," the organization wrote in recommendations adopted at a meeting of its National Council and made public by its press office.

According to BICA, deficit consolidation should be achieved by avoiding growth in the overall wages bill in the public administration (allowing for internal reallocation and linking pay to performance), targeted social payments, prioritization of capital expenditures, and increased revenue collection without raising tax or social security rates.

It is necessary to slow the growth rate of public debt and stabilize it below 30% of GDP, as well as to pursue a trend of gradual reduction in the coming years, supported by a positive budget balance and economic growth, says BICA.

The organization insists that the tax system should remain unchanged, as it is "effective, balanced, competitive, and neutral", which provides a strategic advantage for attracting investment.

To avoid a fiscal crisis, BICA calls for strict fiscal discipline in 2026. Achieving this will require urgent structural reforms. The focus, the organization says, should be on the efficiency of public spending and reforms that cut unnecessary expenses and support economic growth, rather than merely mechanical spending cuts.

An important step toward fiscal stability, according to BICA, would be the introduction of mandatory annual expenditure reviews by function. The organization recommends that each ministry and agency prepare an annual savings plan of at least 5% of current maintenance costs.

BICA also insists that the minimum wage remain unchanged in 2026, until an objective mechanism consistent with the EU directive is adopted.

The association calls for funding to be included in Budget 2026 for an automatic compensation mechanism for non-household electricity consumers in the event of significant increases in electricity prices above the European average.

On Thursday, Finance Minister Temenuzhka Petkova announced that the draft state budget must be submitted to the National Assembly by the end of October.