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MoF Expects Excess of Revenues over Expenditures of BGN 885 million as of end-August 2021

01.09.2021

Based on the preliminary data and estimates, the Consolidated Fiscal Programme (CFP) budget balance as of end-August 2021 is expected to be positive, amounting to BGN 885 million.

The positive developments of the previous months in the part of the major taxes and social security and health insurance contributions continued in August, with tax revenues increasing on a monthly basis by around 18 per cent (BGN 700 million) in nominal terms as compared to the same period of the previous year.

For the eight months of 2021 the biggest growth in comparison to the same period of the previous year has been reported with the corporate taxes (around 26 per cent) and with the tax on dividends and the liquidation quotas of legal persons (over 55 per cent), which is also the result of the NRA campaign aimed at inspecting companies with much cash in hand.

Key CFP parameters based on preliminary data and estimates:

For the eight months of 2021, CFP revenues, grants and donations are expected to be BGN 33,540.3 million, (70.5% of the annual estimates), registering a growth by BGN 4.7 million as against the same period of 2020. Tax and non-tax revenues grow by BGN 4.9 billion, while grant proceeds decrease by BGN 0.2 billion.

The Consolidated Fiscal Programme expenditures, including the contribution of the Republic of Bulgaria to the EU budget, are expected to amount to BGN 32,655.3 million as of August 2021, which accounts for 62.2% of the annual estimates. For comparison, CFP expenditures for the same period of 2020 amount to BGN 27,203.8 million. The considerable growth of expenditures as of August 2021, as compared to the same period of the previous year, is related, on the one hand, with the lower base in 2020 when considerably smaller expenditures for fighting COVID-19 were reported in the first semester, while for the eight months of 2021 those expenditures are considerable, and, on the other hand, with the income and social policies and the higher administration costs set in the Law on the 2021 State Budget of the Republic of Bulgaria.

Looking from the perspective of economic elements, there is a considerable growth in the social and health insurance expenditures. As to pension expenditures, around BGN 845 million have been spent for a monthly allowance of BGN 50 to the pensions of all pensioners for January through August. Along with that, pension expenditures are also influenced by the increased amount of the minimum length-of-service and old-age pension, of the maximum pension as from the start of the year, the baseline effect of the pension increase in July 2020, as well as the increase in July 2021. There is an increase in the health insurance expenditures related to the higher expenses for tackling the pandemic and the arrangements for financing health establishments in the context of the emergency epidemic situation: expenses for medicines, tests, consumables and protective equipment, expenditures supporting front-line staff in the fight against COVID-19 (supplementary monthly remuneration of BGN 1,000), payment to medical staff for vaccination of the population against COVID-19, monthly allowance of BGN 600 for doctors, BGN 360 for nurses and midwives and BGN 120 for hospital attendants, etc. The payments under the 60/40 measure, the 80/20 measure, the Keep Me measure, the Turnover Support for SMEs Affected by the Temporary Anti-Epidemic Measures measure administered by the NRA, etc. have contributed to the growing subsidy expenses for non-financial enterprises.

The part of Bulgaria’s contribution to the EU budget, as paid from the central budget as of August 2021, amounts to BGN 972.4 million, which complies with the existing legislation in the area of EU own resources.

The statistics and the Information Bulletin on the Execution of the State Budget and the key Consolidated Fiscal Programme indicators based on the monthly data on cash execution of first-level spending units as of August 2021 will be published on the website of the Ministry of Finance at the end of September 2021.

 

 

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