Concerns about the revenue part in the 2024 budget are groundless, the finance minister believes
The government is collecting its revenue, it’s going very well. The much talked about VAT revenue is now up 18% for domestic transactions. There is a deficit in only one income – VAT from imports, where we found a huge deficit. This was commented by Finance Minister Asen Vassilev to BNT, after today the cabinet agreed to shrink the revenue part of the budget against a commitment from GERB and DPS to return to the plenary hall on Wednesday. Several consecutive sessions of the parliament failed due to lack of quorum, because the representatives of the two parties refused to register in the plenary hall.
“During the first half of the year, the Customs agency collected significantly less revenue than last year, and they are currently catching up. It is not clear whether they will succeed by the end of the year, but we expect that the revenue part of the budget will be realized almost in the amount that has been pledged”, Vassilev commented.
He described the concerns about the 2024 budget, related to the inclusion of the revenue from the fee for the transfer of Russian gas in the revenue part, as unfounded. “We removed that revenue and scaled back the capital program and investment accordingly. It still remains a record, BGN 10 billion, but in this way we maintain the 3 percent deficit, and the budget is within the framework. If these revenues are realized, we will be able to make an update and complete the capital program in its original form,” Vassilev said.
He rejected accusations that Bulgaria’s entry into the Eurozone is in jeopardy because of the government’s accumulation of debt. “Between 2020 and 2023, the debt is hovering around 22%-23% of GDP and has not gone up,” the finance minister said, adding that while in absolute terms debt amounts are higher, this is not means accumulating debt as GDP grows and our country has a greater ability to repay debts.
He also commented on the agreement reached today on the gradual elimination of the derogation for the import of Russian oil in two stages: from January 1, the export quotas will be suspended, and from March 1, 2024, the import and processing of Russian oil will be completely stopped.
“We had a normal conversation about the derogation. Two things were discussed – that no more money go to “Lukoil” and from there to Russia, and that fuel prices for Bulgarian citizens not be raised, ensuring enough time to switch to non-Russian oil. The decision protects both points – we stop the export, and with it, most of the money to Russia, as soon as possible, on January 1 next year. On March 1, which is the technically minimum deadline to be able to switch to non-Russian oil without jeopardizing the security of fuel supplies for the country, the derogation will be suspended completely,” Vassilev said.
If we stop the derogation for three days, who will find tankers that usually travel from the Middle East to Bulgaria for at least 20 days, asked the finance minister.
He rejected the claims that BGN 1 billion had flowed to Russia through Lukoil. “The profit tax that Lukoil will pay this year is about BGN 400 million. The profit the company realizes is about BGN 600-650 million, i.e. BGN 250 million is the net profit that we do not take for the Bulgarian treasury,” Vassilev said.
He also commented that the government’s proposal for a 10% tax on gratuities actually means a reduction in the tax, as with the inclusion of pension and health insurance payments, the total tax burden is over 30%. “Tips are given in cash and no one pays these taxes. If they are taxed at 10%, without paying insurance, this payment will be lightened,” Vassilev explained and added that in general, lightening measures do not mean raising taxes, but reducing them or a better way to gather.
He stated that he takes the fact that he is the most criticized minister in the government as a compliment. Regarding the “Denkov Gabriel” Cabinet, Vassilev reminded that it has a clear horizon of 18 months to fulfill several key goals – acceptance of Bulgaria into Schengen and the Eurozone, increasing people’s incomes. “From the very beginning, this government has been a very difficult compromise option,” the finance minister pointed out.