Employers Back 2027 Draft State Budget, Unions Divided Over Support 2026

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Employer organizations supported in principle the draft 2027 State Budget Act, while putting forward comments and proposals. The Confederation of Independent Trade Unions in Bulgaria (CITUB) expressed conditional support, while the Podkrepa Confederation of Labour did not support the draft budget, Deputy Prime Minister and Finance Minister Galab Donev said after an extraordinary meeting of the National Council for Tripartite Cooperation. Earlier, they had presented their positions on the draft budgets of the National Health Insurance Fund and the Public Social Insurance system for next year.
The Bulgarian Industrial Capital Association expressed support in principle for the draft 2027 budget and the updated medium-term budget forecast for 2027–2029.
“When preparing the 2027 budget, we proposed an ambitious 2-1-0 target, meaning a deficit under the Consolidated Fiscal Programme (CFP) of no more than 2% of GDP in 2027, 1% in 2028 and a balanced budget in 2029. We are not talking about mechanically reducing public expenditure, but rather restructuring it towards less funding for activities with no proven results and more resources for infrastructure, human capital, productivity and sustainable growth,” said BICA Chairman Rumen Radev.
“BICA welcomes the preservation of the main tax rates, the increase in the value threshold for recognizing fixed assets, accelerated tax depreciation for certain technologies, the increase in the mandatory VAT registration threshold to EUR 60,000 in 2027 and the planned gradual increases thereafter. We would even welcome more ambitious steps in this direction,” Radev said.
He added that these measures would certainly improve the investment environment and create conditions for reducing the administrative burden, particularly for small and medium-sized enterprises.
BICA also welcomed the agreement reached between the government and the social partners on a new mechanism for determining the minimum wage, describing it as an important step towards restoring the role of social dialogue.
However, the association opposed increasing the burden on compliant taxpayers as a substitute for expenditure reforms. In this regard, BICA does not support raising the maximum social security contribution base to EUR 2,400 in 2027 or the across-the-board 6.4% increase in minimum social security contribution thresholds by economic sector.
“I wish you courage in maintaining expenditure reforms, because otherwise the enormous pressure on the revenue side will simply be pointless,” said Boyan Mitrakiev, Executive Director of the Confederation of Employers and Industrialists in Bulgaria (CEIBG). He expressed his organization’s support for the draft budget.
Bulgarian Industrial Association (BIA) Chairman Dobri Mitrev said the organization supported the draft 2027 state budget, albeit with serious reservations.
He explained that BIA’s support was based on the stated commitment to fiscal consolidation, limiting redistribution and reforming public expenditure.
BIA remains firmly opposed to the extraordinary 33% excess profits tax on selected groups of companies. According to Mitrev, the measure contradicts the stated commitment to a predictable tax environment and sends a negative signal to domestic and foreign investors.
“It sets a precedent whereby, whenever a future budget shortfall arises, additional extraordinary revenue could once again be sought from successful businesses. We therefore insist that this proposal be withdrawn,” he said.
BIA’s second major reservation concerns the continued increase in public debt.
“We at the Bulgarian Chamber of Commerce and Industry (BCCI) generally approve of the budget. However, there are certain measures we do not support, foremost among them the excess profits tax, because it is a subjective measure,” said BCCI President Tsvetan Simeonov.
He described the measure as inconsistent with market principles, adding that such measures should not be introduced in a country recognized as a market economy.
“Although it has been announced as a one-off measure, it cannot contribute to the sustainable development of Bulgaria’s budgetary policy,” he added.
“CITUB supports all measures aimed at increasing revenue. However, overall, we believe that expenditure savings are being achieved primarily through cuts in capital expenditure and subsidies. This fiscal tightening is procyclical, and we believe it will create problems in the coming years,” said CITUB President Plamen Dimitrov, who joined the meeting online due to professional commitments abroad.
“We believe these measures significantly underestimate the actual scale of the consolidation,” he noted.
“Regarding financial support for the real economy, which is essential for us, we consider the overall reduction in subsidies, presented as something positive, to be negative and even intolerable,” Dimitrov said.
He also welcomed the planned child benefits and support for families, describing them as a substantial improvement compared with provisions in previous budget procedures.
“If our demands regarding income policy, including the abolition of the 7% tax on food vouchers, are taken into account in one way or another, we are prepared to support the budget,” Dimitrov added.
“The Podkrepa Confederation of Labour has always maintained a principled position when it comes to Bulgaria’s budget: it is better to have a regular budget than no budget at all,” said Ioanis Parteniotis of Podkrepa.
He said the trade union generally welcomed the direction towards fiscal consolidation but was dissatisfied with the budgeted levels of personnel expenditure, the minimum wage, the minimum pension and social security benefits, despite the fact that these benefits would increase for the first time in several years.
“This budget contains indications of a change in the policies pursued by the executive branch, but it does not create the conditions for overcoming inequalities, reducing in-work poverty, addressing the demographic crisis or combating poverty and social exclusion,” Parteniotis noted.
For these reasons, Podkrepa said it could not support the proposed 2027 State Budget Act. The union considers the proposed minimum wage and the mechanism for calculating it unacceptable, along with the insufficient increases in funding for personnel, delegated public services and operating expenses.
During the discussion of the draft state budget, Deputy Prime Minister and Finance Minister Galab Donev said the government was proposing a budget that would restore sustainability to public finances without abandoning support for incomes, families and investment.
To achieve this, the budget includes measures to improve revenue collection, prevent tax and social security contribution evasion and non-payment, and reduce administrative burdens and costs for businesses and citizens, he said.
The draft budget projects a cash-basis deficit of 3.5% of GDP in 2027, narrowing to 3.1% in 2028 and 2.4% in 2029, according to the medium-term budget forecast. Total revenue, grants and donations under the Consolidated Fiscal Programme are expected to range between 35.6% and 36.1% of GDP over the 2027-2029 period. Consolidated fiscal programme expenditure is projected to fall from 43.5% of GDP in 2026 to 39.6% in 2027, followed by further reductions to 38.9% in 2028 and 38% in 2029. Government debt is expected to reach EUR 44.3 billion, or 31.4% of GDP, in 2027, with provision for new borrowing of up to EUR 8.6 billion, while the minimum fiscal reserve at the end of the year is set at EUR 2.6 billion.
The minimum monthly wage is projected to stand at EUR 660 in 2027, while personnel expenditure at first-level budget spending units is to increase by 5% as of January 1, with elected officials and those covered by Article 69 of the Social Security Code (the defence and security sector) excluded. A total of EUR 170.5 million is earmarked for a 7.5% pay rise for teaching professionals from January 1, 2027.
Work-related pensions are to be adjusted on July 1 under the so-called Swiss rule, with EUR 552.6 million allocated for the increase in 2027. Another EUR 72.5 million is earmarked for increasing the amounts of nine of the 12 types of family benefits for children, while EUR 114.3 million is allocated for higher social payments in line with the new poverty line of EUR 443 for 2027.
The monthly childcare allowance for parents looking after children under the age of two is to increase to EUR 450, while mothers returning to work during the child’s second year would receive 75% of the allowance, compared with the current 50%. The minimum daily unemployment benefit is also to rise from EUR 9.21 to EUR 13.
The draft provides for a 10% reduction in personnel expenditure throughout the year, with delegated budgets, municipalities and certain other categories exempted. Civil servants and employees covered by the Judiciary Act would pay their own social security contributions. An additional EUR 493 million is allocated for health insurance payments under the budget of the National Health Insurance Fund, while EUR 634.9 million is earmarked for compensation under temporary electricity price relief programmes, financed through the Electricity System Security Fund.
Defence spending is projected at 2.23% of GDP in 2027, rising to 2.55% in 2029. Capital expenditure under the 2027 draft budget amounts to EUR 6.0186 billion, of which EUR 3.6284 billion is to be financed nationally and EUR 2.3902 billion through European funding, including the National Recovery and Resilience Plan.

Employers Back 2027 Draft State Budget, Unions Divided Over Support 2026 THE NEWS FROM BULGARIA – NEWS AGENCY 2009-2025 2026-11-12 06:38:51

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BULGARIA NEWS – NEWS AGENCY 2009–2026 2026-11-12 06:38:51