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There is a possibility that the government will find a compromise on the issue of child benefits in 2021. The new idea, proposed to Finance Minister Kiril Ananiev by IMRO, is that people with lower incomes receive benefits as cash benefits , and those with higher incomes: tax relief in the same amount.
However, the idea should be clarified in an instant, because on Wednesday the tax laws for 2021 will be voted on at the second reading in the budget committee in parliament and on Thursday in the budget.
We are moving towards the second option, proposed by me a few days ago: those from low-income families who will receive support through the Family Benefits for Children Act and the so-called child allowances, and all the others to receive a tax relief for the same amount: item. F. opportunity for parents to reduce their annual tax base for each child by 4,500 BGN, respectively, as a result of 450 BGN per year of support “, IMRO MP Iskren Veselinov announced.
Krassimir Karakachanov’s party strongly opposed the GERB’s refusal to fulfill its original intention of child benefits for all children in 2021. At the end of last week, GERB deputies amended the draft budget, according to which the Income criterion to receive subsidies and the BGN 204.8 million saved from turnover is transferred to increase the salaries of police officers and doctors.
According to experts, family income tax is a better option to support working families with children than cash benefits. At the moment, the father can reduce his tax base by raising a child, but the discount is negligible: BGN 20 per year for one child. With the changes proposed by Vesselinov, it will increase to a maximum of BGN 450 if the parent has a taxable income with a tax base of at least BGN 4,500 during the year.
The details of the measure have not yet been fully clarified and it is not entirely clear how the parents with the lowest and the highest income will be distinguished.
Currently, the state does not have a working criteria to distinguish families who really need support from others. For this reason, almost half of the children in Bulgaria receive allowances, about 570,000 out of a total of 1,250,000. The reason is that the differentiation is made on the basis of the official income of the parents declared to the ANR, which often does not coincide with the real ones. As a result, a family with an income of over BGN 510 is “rich” for each of its members per month.
According to official data from the National Revenue Agency for 2019, 91.5% of people with taxable income receive up to 2,000 BGN per month and 72%, up to 1,000 BGN. At the same time, currently 100% of child allowances are paid to families with incomes of up to BGN 410 per family member and 80%, between BGN 410 and BGN 510.
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