22.08.2015

"Revenues as of July 2015 are by BGN 2.180 billion more as compared to the same period of the previous year and this is largely due to the improved collection of tax and non-tax revenues, mostly VAT and excise duties." Minister of Finance Vladislav Goranov said the above in an interview for the Trud newspaper. As regards excise duties, the expectations are also for a significant overperformance of the planned revenues, with the minor slowdown as of the end of the first half of the year being overcome quite a while ago - "As of end-July the collection of excise duty revenues has already been 58% or the amount is as it should be, and as of August we register even better performance", Goranov explained. He pointed out that the total overperformance of VAT revenues did not correspond to the economy growth rate and consequently the nominal increase was mainly resulting from the improved collection. The Minister said that there would be overperformance of revenues for 2015 and a large part thereof would be used to reduce deficit. "Our main task is to collect most of the revenues and after that our efforts will be targeted at both successful conclusion of the programming period and reduction of the preliminary set deficit as much as possible as compared to the projections in the annual plans", he was firm.

In connection with the resealing of all dispensers at petrol stations that has been launched the Minister pointed out that disproportions as regards fuels had been identified at the beginning of the summer when the information about the fuels taken out of the tax warehouses had started to deviate from the VAT receipts declared in the system of the revenue administration. The checks also identified the problem that some of the sites could have been manipulated because of the poorly installed devices related to the operation of the dispensers themselves. "We will be uncompromising to all who dare to sell fuels of poor quality and to defraud the revenue", he said. To the question whether there is a possibility for a compromise as regards the measuring devices at agricultural producers Minister Goranov said: "If someone decides that the quantity of fuel s/he uses is small and s/he does not have to make such an investment then s/he can utilize the other methods described in the Ordinance which do not require an additional investment. Fuel producers and traders have many times stated their readiness to supply as much fuel of any sort anywhere in the country as required by agricultural producers".

According to the Finance Minister there is obviously delay in the plan for optimisation of the personnel costs for this year. "I have repeatedly informed the Government about the ministries that do not implement the measures required. We have more than once stated that the limits are fixed in the annual Budget Law and it would be difficult to change them without budget revision which we have no intention to do." According to Goranov there is a real risk that the ministries, which do not observe the schedules for spending and do not take the necessary measures, will experience difficulties at the end of the year. "However, I am an optimist that most of the ministries would be able to cope. For those that do not - the answer is that the State Budget Law defines the limits and it is only the Parliament that can change them", he reminded. Vladislav Goranov stressed that for the first time this year the personnel costs had been fixed in the State Budget Law and the Government could not be tempted to prioritise expenditure for wages on the account of investment and other expenditure and to increase them by its own decision. "To change these parameters, the budget must be revised but there is no need for this", he added.

Vladislav Goranov announced that within the forthcoming campaign for amending the tax legislation amendments would be made also to the Law on Limitations of Cash Payments whereby the amount of permitted payments in cash would be lowered. He added that the forthcoming amendments to the tax legislation would be related to harmonisation with EU law, to improving control and reducing the possibility for tax avoidance, to lowering the administrative burden and to improving the service quality.

As regards the proposed alignment of excise duties on products used as motor fuel with those on fuels used for heating, the analysis shows that the reduced rate is not reflected in reduction of the prices for heating of social establishments, kindergartens and the such, but rather in an increased profit of the traders in fuels, and the distortion of the model shows that such a compensation is useless. "In this context, it is speculative to expect a drastic rise in prices", Goranov pointed out, "but even if that happens, consumers will be compensated through the 2016 budget". The Minister of Finance further said that the time schedule for changes in the excises on cigarettes had been adopted at the end 2014 and at the moment discussion was on-going which would be the most appropriate structure that would lead to relative maintenance of the price levels of the low class cigarettes.