09.08.2013

One of the first things we announced was to clear any state liabilities to the business. This is what Minister of Finance Petar Chobanov said at a meeting with representatives of the Bulgarian Construction Chamber. He added that one of the purposes of the budget revision was to use BGN 160 million to settle the arrears by end-August, but the veto postponed any possibilities for quick reaction.

Mr. Chobanov pointed out that the VAT due by the state to businesses had decreased by BGN 100 million in the last month. The Minister further mentioned that daily measures were taken to improve revenue collection and the business climate in Bulgaria. He reminded that a working group with the major workers' organisations had been set up in order to discuss the options for a reduction in the administrative burden for businesses. The Minister of Finance also said that the measures taken would good results for the business climate which was worsened due to, among other things, the state's failure to pay out on time.

Dichko Prokopiev, a member of the Managing Board of the Bulgarian Construction Chamber, said that municipal payables to businesses amounted to BGN 174 million as of 31 December 2012. According to the Chamber's figures, around 80% of these arrears were to construction companies. He added that some of the liabilities dated back to 2008, and some of the companies had already won their lawsuits at all instances. Mr. Prokopiev added that not only were the municipalities unable to pay out to the companies but they also incurred interest, court charges and default penalties, which burdened the municipal budgets even further. Minister Chobanov said that the state was also partially to be blamed for this state of municipal budgets since the 2010 budget revision stopped 15% of the transfers to municipalities. Deputy Minister of Finance Lyudmila Elkova added that a great part of local government arrears were concentrated in 10 municipalities across the country.

Another range of issues raised by the Bulgarian Construction Chamber was related to the EU projects. Where certain expenditure of a given municipality is not recognized, instead of covering the expenditure by its own budget, the municipality does not pay to the contractors for a work already done. There are situations in which for projects already closed the contractors have to wait for months to receive their money from the contracting authorities.