29.08.2014

The budget balance on a cash basis under the Consolidated Fiscal Programme (CFP) as of 31 July 2014 is negative, amounting to BGN 1,147.2 million and is formed by a deficit under the national budget of BGN 647.5 million and a deficit under EU funds of BGN 499.7 million. The faster growth of expenditure and the delay in planned tax revenue performance are the main factors for the formation of the CFP deficit for the first seven months of the year. The deficit is also influenced by the suspended by the EC payments under OP Environment and under two axes of OP Regional Development where after the payments are resumed it is expected certified expenditure totalling BGN 478.3 million to be reimbursed. Compared to the deficit for the same period of 2013 (BGN 168.2 million) the budget position worsens by BGN 979.1 million (1.2 pp of GDP).

Consolidated revenues and grants under CFP for the reported period stand at BGN 16,840.5 million, or 54.3 % of the annual plans for 2014 under the State Budget Law. Compared to the same period of last year revenues under the CFP have risen by 1.4% (BGN 230.7 million) in nominal terms, the nominal growth planned in the 2014 State Budget Law compared to the reported for 2013 being 7.1% (BGN 2.1 billion).

At end-July 2014 tax proceeds, including revenues from social security contributions, total BGN 13,190.5 million, which is 54.2 % of the 2014 plans, while for the same period of 2013 this figure was 56.2%. Compared to the same period of the previous year tax revenues under the CFP have risen by BGN 338.3 million in nominal terms (2.6%), but at the same time this is a considerable delay compared to the planned growth for the year compared to the reported proceeds for 2013 of 8.8%.

Direct tax revenues amount to BGN 2,602.1 million, which accounts for 60.2 % of the annual plans and have risen by 9.1% compared to the same period of 2013. The increase for the seven months of the year is reported mainly in the revenues under PITL - by BGN 196.4 million or 14.4% more than for the same period of last year.

Indirect tax revenues amount to BGN 6,423.6 million, or 50.1 % of the annual plans, while as of the end of July 2013 this figure was 54.5%. The underperformance of 4.4 pp compared to the reported performance for the previous year is mainly in VAT and excise duties. VAT revenues amount to BGN 4,126.6 million, or 49.8 %; excise duty revenues - BGN 2,195.1 million, or 50.1 %; customs duty revenues - BGN 85.5 million, or 62.8%. For the period January-July 2014 the VAT refunded amounted to BGN 3,328.4 million while for the same period of 2013 - BGN 3,334.5 million. Compared to the same period of the previous year indirect tax revenues decreased by BGN 77.3 million mainly as a result of lower VAT revenues on imports. The change in the level of the non-refunded within the time limits tax credit under the VATL and a base effect of received in February 2013 arrears to the amount of BGN 65 million influence the performance of VAT revenues from transactions in the country and Intra-Community supplies. The level of non-refunded tax credit lowered by BGN 112.6 million - from BGN 242.6 million as of July 2013 to BGN 130.0 million as of July 2014. 

Proceeds from other taxes, including property taxes and other taxes under the Corporate Income Tax Law, amount to BGN 558.6 million, or 62.2 % of the annual plans, while this figure as of July 2013 was 65.0%.

Revenues from social security and health insurance contributions are BGN 3,606.3 million, or 57.4 % of those planned for the year. Compared to the same period of the previous year these revenues have risen by 4.8% (BGN 165.2 million) in nominal terms

Non-tax revenues and grants amount to BGN 3,650.1 million, or 54.4 % of those planned for the year. On the one hand, the changed deadlines for paying the dividends for the state by the state owned enterprises and, on the other, the one-off revenues in 2013 make non-tax revenues incomparable for the two years.

The expenditures under the consolidated fiscal programme, including the contribution of the Republic of Bulgaria to the EU budget, as of 31.07.2014 amount to BGN 17,987.8 million, which is 55.3 % of the annual plans. Compared to July 2013 expenditure under the CFP have risen by BGN 1,209.7 million (7.2 %), mainly due to higher expenditure under European programmes and funds, and to growth of social and health insurance payments. Expenditure under the EU funds accounts (including national co-financing) have risen by 45.1% (BGN 699.5 million) compared to the same period of 2013 and expenditure under the national budget - by 3.4% (BGN 500.2 million). The growth in social expenditure is mainly due to the basic effect of the increase of pensions as from 1 April 2013 and to higher health insurance payment in the first months of 2014 linked to payment of last year liabilities, etc. The approved by Council of Ministers decrees additional expenditure under the budgets of a number of first level spending units in the last months of the previous government term of office also have an impact on the expenditure performance parameters.

Non-interest expenditures amount to BGN 16,907.9 million or 56.8 % of the annual plans. Non-interest current expenditure as of end-July 2014 amount to BGN 14,789.2 million, or 59.6 % of the plans, capital expenditure (including net increment of state reserve) amount to BGN 2,118.7 million, or 42.4 % of the plans for 2014. Interest payments amount to BGN 464.6 million, or 69.4 % of the plans for 2014.

The part of Bulgaria's contribution to the EU budget, as paid as of 31/07/2014 from the central budget, amounts to BGN 615.3 million, which complies with Council Regulation 1150/2000 of 22 May 2000 implementing Decision 94/728/EC, Euratom on the system of the Communities' own resources.

Fiscal reserve as of 31.07.2014 is BGN 8.9 billion, including BGN 8.3 billion deposits in BNB and banks and BGN 0.6 billion receivables under the EU Funds for certified expenditure, advance payments, etc. In accordance with §1, point 41 of the Public Finances Law Additional Provisions the fiscal reserve scope has been changed to include the receivables under the EU Funds for certified expenditure, advance payments, etc.

Data on the consolidated programme implementation as of 31 July 2014 are published on the website of the Ministry of Finance in category Topical Publications/Statistics.