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“In 2019 we moved up one place and now we are in second place after Estonia with the lowest debt of the general government sector in the EU in 2019: 20.4% of GDP. Compared to 2018, we report a decrease in this In the first two months of this year, we reported an acceleration of the growth of the turnover in the industry in the domestic market and reached 9.7% compared to the same period last year.
Retail turnover in January-February also increased, as did our merchandise exports by 4.9%. Even in March, the budget execution parameters are good, as the consolidated fiscal program reports an excess of income over expenses of 1.2% of projected GDP.
Due to the pandemic and the negative tax effects of declining revenue, due to restrictive measures in Bulgaria and the main trading partners of the EU and third countries, our expectations are that the budget implementation parameters will be somewhat delayed and they will express themselves vigorously. in the second and third quarter of this year. That is why the Bulgarian government has taken measures to preserve jobs like 60 to 40, as well as a number of other measures to help people and companies.
We do not plan to limit payments on large infrastructure projects, planned for financing and implementation with estimates for the year, which will support investments in the event of the expected decline in the non-public sector. We are also taking steps to restructure the Operational Programs, co-financed by the EU, which will provide BGN 870 million for measures to support the economy and fight infection with COVID-19.
In its forecasts, the EC notes that the strength of the Bulgarian economy and positive external and fiscal balances before the outbreak of the COVID-19 pandemic are a prerequisite for a rapid economic recovery. Experts expect this to happen in 2021, so the government will do everything possible to help all Bulgarians, “said the prime minister.
“The Council of Ministers approved information on the cash execution of the state budget and the main indicators of the consolidated fiscal program for the first quarter of 2020, prepared in accordance with Article 135, paragraph 1 of the Public Finance Law, based on the monthly reports for the cash execution of top-tier budget managers, “explained the government information service.
According to the data from the monthly reports of the first-level budget managers, the income, grants and donations according to the PPC as of March 2020 amount to BGN 10,977.0 million or 23.4% of the annual estimates. Compared to the same period of the previous year, they increased nominally by BGN 119.0 million. Tax and non-tax revenue decreased by BGN 153.6 million (1.5%), and revenue from donations and grants (mainly grants) according to EU programs and funds) is higher at BGN 272.6 million (48.5%) compared end of March 2019.
It should be borne in mind that the negative effects on revenue caused by measures to combat the pandemic will affect the parameters of budget execution with some delay. In this sense, the income performance parameters at the end of March have not yet been significantly affected by the crisis caused by the coronavirus pandemic and reflect only the most immediate effects of the measures taken and the modified macroeconomic environment. Structurally, the most notable effect of direct taxes is the extension of the terms established in the Corporate Income Tax Law, which displaces a large part of income from March to June, while indirect taxes show a delay in the income from VAT on imports, income from special taxes and others.
The total amount of tax revenue, incl. Revenue from social security contributions amounted to BGN 8,580.6 million, representing 23% of the expected tax revenue for the year.
Direct tax revenues amount to BGN 1,308.6 million or 18.2% of those projected in the estimates for the year. In this group, the implementation of corporate tax revenue is less, in relation to the extension of the terms for 2020 under the Corporate Income Tax Law with the Law of Measures and Actions during the State of Emergency, announced by a decision of the Supervisory Board of March 13. 2020.
Indirect tax revenues amount to BGN 4,328.2 million, which is 24.4% of the estimates for the year. VAT revenue amounts to BGN 2,940.9 million, or 25.1% of forecast. The state of emergency introduced in the country still does not significantly affect VAT revenues at the end of the first quarter of 2020. The deteriorating macroeconomic indicators of consumption, imports, exports and the price of crude oil are expected to have a negative impact. in tax revenue in the coming months. The income from consumption taxes amounts to BGN 1,320.6 million (23.2% of those projected for the year). In the case of excise duties, the COVID-19 crisis is expected to primarily affect fuel and alcohol consumption, which will also affect revenue in the following reporting periods.
Customs revenue is BGN 54.6 million or 23% of annual estimates.
Income from other taxes (including property taxes and other taxes under CITES) amounts to BGN 294.7 million or 24% of the annual estimates.
Revenue from contributions to social and health insurance amounted to 2,649.1 million BGN, which is 23.6% of the estimates for the year.
Non-tax revenues amount to BGN 1,561.9 million, which represents 23.0% of the annual estimates.
The income from subsidies and donations amounts to BGN 834.4 million.
The expenditure under the CFP (including the contribution of the Republic of Bulgaria to the EU budget) as of March 2020 amounts to BGN 9,550.4 million, which is 20.4% of the annual estimates. By way of comparison, the expenses of the CFP as of March 2019 amounted to BGN 9,053.5 million. The nominal increase compared to the same period of the previous year is mainly due to the greater amount of social payments (basic effect of the increase in pensions from July 2019), as well as to a greater amount of maintenance costs, costs personnel, capital costs and others.
With respect to the measures in the implementation of the Law of Measures and Actions during the State of Emergency, announced by a Decision of the National Assembly of March 13, 2020, during the reporting period, mainly expenses related to the Health. The most urgent expenses related to the provision of protective clothing, disinfectants, medical supplies and others for medical personnel, which are at the forefront in the fight against infection, have been financed. Most of these costs are provided within the budgets of top-tier budget managers.
Interest-free expenses amount to BGN 8,857.0 million, which represents 19.9% of the annual estimates. Current interest-free expenses as of March 2020 amount to BGN 8,280.2 million, capital expenditures (including net growth of the state reserve) amount to BGN 569.1 million. Current and capital transfers provided abroad amount to BGN 7.7 million. Interest payments amount to BGN 319.8 million or 48.8% of those planned for 2020.
The part of the contribution of the Republic of Bulgaria to the EU budget, paid from 03.31.2020 from the central budget, amounts to BGN 373.6 million, which complies with current legislation in the field of resources of the EU – Decision Council Regulation 2014/335 / EU, Euratom on the system of own resources of the European Union, Council Regulation (EU, Euratom) № 608/2014 of May 26, 2014 that establishes measures for the implementation of the EU’s own resources system and Council Regulation (EU, Euratom) № 609/2014 of 26 May 2014 on methods and procedures for providing traditional own resources, VAT-based own resources and GNI and measures to meet cash requirements, as amended by Council Regulation (EC, Euratom) 2016/804 of May 17, 2016.
The budget balance under the CFP in cash as of March 2020 is positive in the amount of BGN 1,426.5 million and is made up of excess income over expenses in the national budget in the amount of BGN 1,059.8 million and in European funds in the amount of BGN 366.8 million.
The amount of the tax reserve as of March 31, 2020 is BGN 10.3 billion, incl. BGN 9.9 billion of tax reserve deposits with BNB and banks and BGN 0.4 billion receivable from European Union funds for certified expenses, advances and others.
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