March 16 (SeeNews) - Bulgaria plans to propose in the 2023 draft state budget a package of spending and revenue measures designed to curb budget deficit to 3% of the gross domestic product (GDP) planned for this year, finance minister Rossitza Velkova said.
Bulgaria's 2023 deficit currently stands at 6.9% of GDP on an accrual basis, Velkova said in a statement on Wednesday. In 2022, Bulgaria posted a budget gap of 2.9% of GDP.
The draft budget bill will be presented for public debate on April 3. The finance ministry plans to submit it to a parliamentary vote at the end of April, once a new parliament is formed after the early general elections on April 2. At present, the caretaker government is operating under the provisions of last year's budget that were extended into 2023.
As part of the measures, the finance ministry will propose restoring some of the reduced rates of VAT and excise duties, as well as increasing road toll taxes and concession fees. No changes are planned to the current tax rates for bread and milling flour, baby goods and books, however. In the 2022 revised budget, parliament introduced a 2 billion levs ($1.08 billion/1.02 billion euro) anti-crisis package that included scrapping the excise tax on electricity, liquefied natural gas (LNG) and natural gas until June 30, 2025, and lowered VAT on the supply of heating energy and natural gas until July 1, 2023.
"The expected effect of the revenue-side measures to be proposed is in the amount of 6 billion levs, which will ensure the implementation from July 1 of the Swiss rule in the adjustment of pensions and will guarantee the payment of increased wages," Velkova said.
The finance ministry is also considering a proposal for introducing in the second half of this year a one-off 33% tax on windfall profits for 2022 of all companies in Bulgaria except state-owned ones, Velkova said as seen in a video by private broadcaster Nova TV.
As an EU member state, Bulgaria is required to maintain its budget deficit below 3% of GDP.
Last month, Velkova said that Bulgaria will not be able to join the eurozone on January 1, 2024 as previously planned due to a delay in adopting required legislation and failure to keep inflation within prescribed limits.
(1 euro = 1.95583 levs)