29.04.2021

Based on the monthly data, the Consolidated Fiscal Programme (CFP) budget balance on a cash basis as of March 2021 is negative, amounting to BGN 619.4 million, or 0.5% of the projected GDP, and is formed by a national budget deficit of BGN 582.3 million and by a EU funds deficit of BGN 37.1 million.

CFP revenues, grants and donations as of March 2021 amount to BGN 11,348.1 million, or 23.8% of the annual estimates. Compared to the same period of the previous year when budget revenues were not yet affected negatively by the COVID-19 outbreak in Bulgaria, proceeds as of March 2021 have grown by BGN 370.8 million. or by 3.4%. Tax and non-tax proceeds register a growth by BGN 501.6 million (4.9%), while grant and donation proceeds (mostly EU programme and fund grants) diminish by BGN 130.8 million, or by 15.7%, compared to end-March 2020.

CFP tax proceeds, including revenues from social security contributions, total BGN 8,830.3 million, which accounts for 23.8% of the tax revenues planned for the year. Tax and social security contribution proceeds grow by BGN 249.6 million (2,9%) compared to those reported for Q1 of the previous year, forming 77.8% of the overall CFP proceeds for the period. Tax revenues are influenced by the legislative amendments made to the deadlines for submitting the 2020 annual tax returns under the Corporate Income Tax Law, as well as for payment of the corporate income tax, the tax on expenses, the tax on revenues of budget enterprises, as well as the tax due on vessels operation activity (from 31 March to 30 June 2021). In 2020, given the quick measures taken at the outbreak of the pandemic, the Corporate Income Tax Law deadline was also extended; however some of the tax liable persons had already submitted their 2019 returns and had paid an equalising corporate tax payment in the statutory period before the extension, i.e. 31 March 2020.

Direct tax revenues amount to BGN 1,263.2 million, or 18.1% of those planned for the year. Indirect tax proceeds amount to BGN 4,402.7 million (25.8% of the annual estimates), with VAT proceeds amounting to BGN 3,126.8 million (27.9% of those planned), excise duty revenues amounting to BGN 1,205.7 million (21.6% of the estimates), and customs duty proceeds amounting to BGN 58.4 million (24.9% as against the annual estimates). Proceeds from other taxes, including property and other taxes under the Corporate Income Tax Law, amount to BGN 336.5 million, or execution of 26.2% of the annual estimates. Revenues from social security and health insurance contributions are BGN 2,827.8 million, which accounts for 24.2% of the estimates for the year.

CFP non-tax revenues amount to BGN 1,814.1 million, or 27.5% of the annual estimates, while grant and donation proceeds amount to BGN 703.7 million.

CFP expenditures, including the contribution of the Republic of Bulgaria to the EU budget for March 2021, amount to BGN 11,967.5 million, which accounts for 22.8% of the annual estimates. For comparison, the CFP expenditures as of March 2020 amount to BGN 9,550.9 million. The considerable growth of expenditures in Q1 of 2021, as compared to the previous year, is related, on the one hand, with the lower base in 2020 when insignificant expenditures for fighting COVID-19 were reported, while in Q1 of 2021 those expenditures are considerable, and, on the other hand, with the income and social policies set in the approved Law on the 2021 State Budget of the Republic of Bulgaria.

The measures aimed to tackle COVID-19 and to address the social and economic implications of the pandemic have a significant contribution to the growing expenditures in Q1 of 2021. 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. As to pension expenditures, BGN 314.2 million have been spent for a monthly allowance of BGN 50 to the pensions of all pensioners for January through March. In parallel to that pension expenditures are also influenced by the increased amount of the minimum old-age pension and of the maximum pension as from the start of the year, as well by the baseline effect of the pension increase in July 2020. There is an increase in health insurance expenditures related to higher expenses for tackling the pandemic and arrangements for financing health establishments in the context of the emergency epidemic situation, including expenses for medicines, tests, 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. Capital and maintenance expenditures have also increased in comparison to the same period of the previous year, which is due to payments related to investment projects of the Bulgarian army, repair works of road infrastructure sites, winter maintenance of the Republican road network, etc.

Non-interest expenditures amount to BGN 11,169.5 million, which accounts for 22.3% of the annual estimates. Non-interest current expenditures as of March 2021 amount to BGN 10,349.4 million, capital expenditures (including net increment of state reserve) amount to BGN 813.6 million. The current and capital transfers to other countries amount to BGN 6.5 million. Interest payments amount to BGN 318.8 million, or 48.5% of those planned for 2021.

The part of Bulgaria’s contribution to the EU budget, as paid from the central budget as of 31.03.2021, amounts to BGN 479.3 million, which complies with the existing legislation in the area of EU own resources.

The fiscal reserve as of 31.03.2021 is BGN 7.9 billion, including BGN 7.8 billion of fiscal reserve deposits in the BNB and in banks and BGN 0.1 billion of receivables under the EU Funds for certified expenditures, advance payments, etc.

The Consolidated Fiscal Programme implementation data as of 31 March 2021 are published on the website of the Ministry of Finance, in Statistics section. The statistics is accompanied by an Information Bulletin on the Execution of the State Budget and the Main Indicators of the Consolidated Fiscal Programme, which represents a short analysis of the performance of the key budget parameters on a consolidated level and by constituent budgets.