11.11.2014

We do not want to transfer to the next year the failures of the wrongly drafted budget

 "The Council of Ministers has approved and will propose to the National Assembly a Law to amend the Value Added Tax Law with amendments provided therein to amend the other tax laws and a Law to amend the 2014 State Budget of Republic of Bulgaria Law", Minister Vladislav Goranov stated at a press conference after the ad hoc meeting of the Government. When presenting the draft VATL in its part on the excise duties and tax warehouses Minister Goranov specified that a 3-step schedule was provided for raising excise on tobacco to reach the minimum EU rate of EUR 90 per 1,000 pcs. until 2018. He emphasised that the decision the first step to be implemented as from 1 January 2016 was determined by the increasing contraband. "We will make considerable efforts to improve the joint work of the revenue administrations to reduce it. We do not consider proper to make this change in the excise duty on tobacco before we are convinced that we have harnessed the processes and reduced the drastically increased in the last year and half contraband", Minister Goranov commented.

The Minister of Finance explained also the draft to revise the this year budget, which was based on a precise analysis of the expenditure side. He assured that urgent expenditures were included, which if not paid would become arrears for 2015. "The deficit is high, but objective," he pointed out in reply to a question how would he reply to the criticisms for its rising to 3.7% of GDP. "This is a quite high deficit being the result of wrong planning and bad European Funds management", he added.  The Finance Minister was adamant that lower than the planned deficit would lead to accumulation of huge arrears to the businesses and its carrying over to the next year, which on its part would distort the actual results for its value. According to the Minister we will show lower deficit on a cash basis, which the EC will immediately adjust with the real expenditure on accrual basis that the state should have made. "We have no fault for the thus wrongly drafted budget and we do not want to transfer the failures thereof to the next year", is his position. He added: "We are aware that an excessive deficit procedure could be initiated against Bulgaria. We will explain to our colleagues in Brussels what has caused it and we will take the necessary steps as soon as possible to bring the national public finances within the 3% deficit limit."

Vladislav Goranov pointed out that in the transitional and final provisions of the draft to amend the budget texts had been included related to the solution of the problems caused by the revocation of the CCB licence. "The Bank Deposit Insurance Fund is only a tool of the state to honour its commitments to the Bulgarian citizens and the attempts to transfer the subject to it is evading responsibility - the state must do its work and ensure the payment of these deposits as soon as possible", Minister of Finance Vladislav Goranov stated.