The Cabinet gave the thumb-up to the fiscal framework for the period 2008 – 2010. The gross domestic product (GDP) will grow 6.0 pct. The annual inflation rate should fall to 2.5 pct from 3.7 pct at present by the end of the year. The Cabinet sees a budget surplus of 2.5 pct of GDP. А flat 10 pct tax rate will be imposed next year on the incomes of individuals. Those with the lowest incomes will get one-off bonuses. The bottom wage will be increased to 220 levs next year. Budget wages will rise by 10 pct as of July 1, 2008 and still further if the administrative structures are optimised. The social security contribution rate will drop by 1.0 percentage point with 1.0 point going for pensions and 2.0 points to the unemployment benefits fund. The ratio paid by the employer and the employee will change to 65:35 from the 60:40 at present. The maximum monthly taxable income will be set at 2,000 levs next year. The bottom will be 240 levs.
The health contribution for persons aged below 18 and students will be raised from the present 0.5 pct to 3.0 pct of the minimum taxable income of those who pay their own contributions. Pensdions will grow by another 10 pct next year. Over the next three years they will be formed on the Swiss 50/50 rule – 50 pct of the inflation rate for the respective year and 50 pct of the growth of the taxable income for the previous year. The excise duty on cigarettes will be hiked by 50 pct from the last negotiated step and by a new 50 pct in 2009. In 2007 the duty rose to 54 pct from 48 pct of the retail price.
($ = 1.427 Bulgarian levs)
1-5/09/07, P4
