25.05.2022

FROM TOMORROW WE WORK FOR OURSELVES

We have been working for the state for exactly 146 days in 2022, according to the Institute for Market Economics.

The state budget, adopted this year at the end of February, envisages public revenues of over BGN 57 billion in 2022. Assuming that we produce an average of BGN 392 million per day - calculated on the basis of GDP projected at the time of budget adoption. 143 billion levs - we need at least 146 days to replenish the state treasury.

The duration of this period corresponds to revenues under the consolidated fiscal program amounting to 40% of the country's GDP. In the last two years, as a result of higher levels of redistribution through the budget, the date of tax freedom in our country has shifted from mid to late May.

While immediately before the pandemic the levels of redistribution are in the range of 36-37% of the country's GDP, and the budget balance is around zero, after the impact of the pandemic in 2020 we see a growing role of the state and relatively high levels of budget deficit. more from IME.

The country's medium-term budget forecast predicts that consolidated revenues will remain at around 40 percent and that the budget deficit will remain around or even above 3% of GDP until at least 2024. This means that the day of tax freedom will remain at the end. in May and in the following years.

In 2022, the budget has a deficit of BGN 5.9 billion or 4.1% of the country's GDP. The BGN 5.9 billion in question is equal to more than 15 working days. These are the extra days during which the economy would work only for the budget, if it had to cover the planned deficit. We call them working days, because the deficit ultimately weighs on taxpayers - albeit postponed to the future. At the same time, Bulgaria receives grants from European citizens, as the planned revenues from the EU budget are over BGN 5.1 billion. Transfers from the EU actually save us nearly 13 days of work for the state. The official date of tax freedom - May 26 - takes into account all revenues, including the "contribution" of European taxpayers.

And this year we will mainly work to pay two main groups of taxes. In total, we need nearly 58 days for direct taxes and social and health insurance - 24 days for direct taxes and 34 days for insurance funds. We need 54 days for indirect taxes, and nearly 38 days are only for VAT revenues.

Property taxes, which are a key source of revenue for municipalities, take us a little over 3 days. We need 18 days for non-tax revenues, and here the revenues from the various fees for citizens and businesses have the greatest weight.