Pencho Milkov’s proposal: From January 1, 2024, the tax on real estate will increase Shore News

A draft Ordinance amending and supplementing Ordinance No. 20 for determining the amount of local taxes on the territory of Ruse Municipality has been published for public discussion on the website of the Ruse Municipal Council.

The proposal is from the mayor Pencho Milkov.

“Given the impossibility of securing the revenue part of the budget of the municipality of Ruse for 2024 from the sale of property, privatization, rents, etc., and I find it appropriate to update the determined amount of the real estate tax (DNI). The legislator has granted to municipal councils the right to determine the tax from 0.1 to 4.5 per thousand.

Historically for the whole country in the period 1997-2007. the amount of real estate tax was 1.5 per thousand. After the opportunity appeared, some municipal councils raised the rates, and in the municipality of Ruse the amount was reduced to 1.2 per thousand. Subsequently, with a decision dated 15.12.2016. of the Municipal Council – Ruse, the tax on real estate has been raised to 2 per thousand”, the mayor motivated his proposal.

Now the proposal is to change from 2 per thousand to 3.

It is also proposed to update the amount of the tax for the acquisition of property by donation and by way of compensation (DVPI).

It is proposed that the Municipal Council approve an increase in the per thousand from 2.2 to 2.7.

With the development of a forecast for the period 2024-2026 of receipts from local revenues and expenses for local activities, a shortage of controls in the amount of BGN 10 million for 2024 is outlined, without a planned reserve, reduced investment costs, reduced costs for current repairs, and a real significant deficit in the data for 2025 and 2026. According to the Public Finance Act / the Public Finance Act / permanently increasing costs are secured with permanently increasing revenues, such as property taxes and solid waste.

According to the instructions of the Minister of Finance, the forecast for the period 2024-2026 has been prepared with the amount of the minimum wage as follows:

• 2024 – BGN 933, i.e. 20% more than 2023;
• 2025 – BGN 1,033, i.e. 32% more than 2023;
• 2026 – BGN 1140, i.e. 46% more than 2023.

In the municipality of Ruse, 916 full-time and part-time personnel have been revealed in the local activities and in the supplementary financing of the state activities.

Given the worsening economic situation with rising prices, the overall average annual consumer price index for the previous 12 months was 14.3%, and for the period January 2017 to July 2023 – 41%. Compared to 2017, the 2024 MPI is expected to increase by 103%, in 2025 by 125%, and in 2026 by 147%.

Another factor that affects an increase in costs is the repayment of principals on long-term loans from banks and the Urban Development Fund from BGN 1.481 million in 2023 to BGN 3.589 million in the next period. Expectations from the sale of non-financial assets are in the direction of a decrease of over BGN 6.739 million compared to 2023.

The above implies a lack of permanent revenues to compensate for the permanent increase in expenses in all budget areas.

The Ordinance enters into force on January 1, 2024.

The interested parties are given a 30-day deadline for proposals and opinions on the project. The latter can be deposited in the office of the Municipality of Ruse, located at “Svoboda” Square #6 /Center for Administrative and Information Services/ or sent to e-mail: [email protected].