Bulgarian Parliament passes 2013 Budget

Written by on December 6, 2012 in Bulgaria, Business, News - No comments

Bulgarian MPs passed the 2013 Budget Act at second reading on December 6, with the bill engendering little debate and the opposition more intent on extracting an apology from Finance Minister Simeon Dyankov than on futile attempts to pursue last-second amendments.

Less likely to seek controversy than other Cabinet ministers, Dyankov nevertheless ignited passions the previous night, commenting that “opposition MPs are probably drunk already” after Parliament ended the day’s session at about 10pm, even though it was expected to continue until midnight.

On the morning of December 6, several MPs from the socialist opposition took the pulpit to demand an apology. After Speaker Tsetska Tsacheva repeatedly made the point that it was beyond Parliament’s power to do so, a motion to remove Dyankov from the proceedings was voted down.

Opposition MPs began chanting for Dyankov’s resignation then, prompting Tsacheva to declare a short recess. After MPs reconvened, Dyankov apologised saying that it was the fatigue from the long session the previous day that prompted his remark.

That bout of excitement aside, voting proceeded as expected, with the ruling majority shutting down motions from the opposition for higher allocations for municipalities (slated to get 1.9 billion leva in 2013) and increased maternity aid payments.

The previous day, MPs passed several other key components of the 2013 Budget, including the health care and social security budgets, as well as the macroeconomic framework, which envisions revenues of 18.4 billion leva (including 16.6 billion leva from taxes), and total spending of 19.2 billion leva (including 908 million leva as Bulgaria’s contribution to the EU budget).

Among the key provisions of next year’s Budget is an increase of the minimum salary to 310 leva starting January 1 and an increase of the minimum pension to 150 leva starting April 1.

In November, Parliament approved several amendments to tax laws, tabled alongside the Budget bill, which are expected to increase the revenue base. Chief among these, and the one that stirred the most controversy, is the introduction of a 10 per cent tax on deposit interest

The tax will go into effect on January 1 2013 and is expected to bring 120 million leva in Budget revenue – a minor, but much-needed boost. The tax will be levied on deposits held in Bulgarian banks, but also banks in other EU member states and European Economic Area countries, as well as Switzerland, with which Bulgaria recently signed an amended agreement to disclose banking information.

(Photo: Clive Leviev-Sawyer)

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