Bulgarian Parliament approves 2023 Budget Act at second reading

Bulgaria’s National Assembly has given its final approval to the 2023 Budget Act in the early morning hours of July 28, with Parliament sitting nearly 20 hours for debates and voting. It previously approved the separate health care and pension budgets on July 26.

The budget threatened to sour relations between the two largest groups in the National Assembly, the GERB-UDF and WCC-DB coalitions, after Parliament’s budget committee voted down a number of the bill’s provisions at its sitting on July 25.

GERB-UDF and WCC-DB both support the Nikolai Denkov cabinet, which they voted into office on June 6, but have no formal government coalition agreement.

Finance Minister Assen Vassilev said after the committee sitting that he no longer supported the draft bill after the committee rejected some of the bill’s provisions aimed at boosting revenue collection and limiting tax avoidance.

Vassilev said that in doing so, the budget committee hamstrung the finance ministry’s ability to reach its revenue targets.

Fences were quickly mended the next day, with GERB-UDF and WCC-DB agreeing a governance programme for the rest of the year, with GERB leader Boiko Borissov giving assurances that his parliamentary group would back the budget as drafted by the ministry at second reading.

Although some of the ministry’s proposals were watered down at second reading – in particular, a provision that all companies with more than 50 employees had to pay salaries though banks rather than in cash was amended to apply to companies with 100 employees or more – Vassilev said after the budget’s passage that he was content with the final version of the bill.

The Budget package tabled by the Denkov cabinet targets a deficit of three per cent. The cash deficit of the consolidated fiscal programme – which includes the state Budget, local administration budgets, healthcare and pension funds – is set at 2.5 per cent.

The economic growth target is 1.8 per cent, compared to 1.5 per cent projected by the European Commission in its spring forecast.

Normally Bulgaria’s Parliament approves a Budget before the start of that year, but the previous 48th National Assembly failed to elect a government and had to extend the duration of the provisions of the 2022 Budget Act.

(Bulgarian National Assembly building. Photo: parliament.bg)

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