Bulgaria Revises Budget Following Underperformance
17 July 2013
Posted by: Author: Lorys Charalambous
Author: Lorys Charalambous
Bulgaria is planning to revise its budget for 2013, following revenue under-performance, which it says has been due to factors that include underestimating the effects of legislative changes on tax deadlines and overestimating revenues from a tax on interest earnings.
The proposed amendment will revise revenue forecasts and implement "the most urgent" stabilization measures of the Government programme targeting growth, improvement of the business environment, and support for disabled people.
Other factors in the shortfall include "optimistic assumptions" in the macro-framework forecast, contracting domestic demand, changes in the export and import environment, and fluctuating exchange rates. As a result, VAT and export duty revenues have also been low.
The Government now expects revenues for 2013 of around BGN555m (USD373m), compared to an original estimate of almost BGN980m (USD659m), and economic growth of around 1 percent, against an original figure of 1.9 percent. The deficit is now predicted to be 2 percent of forecasted GDP.
The Government says that the revision will preserve the financial and fiscal stability of the State.
Minister of Finance Petar Chobanov mentioned earlier this month that the budget would be revised. At the time, he also promised to improve tax administration by analyzing potential problems in the implementation of a single tax and insurance account, reducing paperwork, and implementing new statutory options for paying arrears.