25.01.2014

During the past months we showed care for the people with low income, but we also gave a hand to the businesses enabling them to think and plan at ease and to start investing and opening new jobs, Minister of Finance Petar Chobanov stated in an interview for 24 Hours daily. He added that the state was fiscally stable which was demonstrated by the preliminary data for the budget implementation as of 31 December 2013. According to Chobanov \"the deficit on a cash basis is below 2%, most probably - 1.9%\". The Minister continues to believe that without a budget revision there would have been additional lowering of the growth potential for the economy. \"We have chosen a different way and there is already data that we have been right. For the 3^rd quarter of 2013 seasonally not adjusted data show economic growth of 1.5% on an annual basis\".

As regards the businesses \"one of the first changes in the VAT regime was to refund the tax by order of receipt of the requests and not randomly by the NRA\", Minister Chobanov commented and added that \"thus we have ceased the evil practice some companies to receive the refund faster than others\". He added that at the end of last year all the VAT due was refunded with the exception of that under inspection - the VAT refunded in December 2013 amounted to BGN 540 million or by BGN 300 million more compared to December 2012. The not refunded VAT at the end of 2013 is BGN 240 million, the lowest level in the past 7 years. According to Chobanov it is for the first time for years the state to start a year with squared accounts with the businesses. He added that the liquidity provided allowed the restart of the economy. This was reflected in higher tax revenues than expected at the end of the year. \"The results categorically refuted the sombre forecasts that the revenue administrations were not working and that we would use the practices of the near past by delaying VAT refund to achieve our fiscal objectives on paper\", he emphasised. The Minister of Finance reminded that even payments under EU projects had not been stopped in the last quarter \"irrespective of the fact that we were aware that the EC would not be able to reimburse the money by the end of the year, because the money was necessary for the liquidity of the businesses\".

Preliminary data show that the consolidated government debt as of the end of 2013 is BGN 14.1 billion, which is by BGN 300 million less compared to end of Q3 2013, stated Chobanov. \"We have not increased the overall debt, but on the contrary - we have decreased it\". The Minister of Finance commented that \"at the beginning of 2014 in order to adjust the net cash flows to and from the budget and given the significant payments due in January the issuing policy of the Ministry of Finance foresees the issuing of short term Government Securities (GS) in the first months of the year\". The Minister specified that unlike last year when the GS issue dedicated to paying farmers\' subsidies was extraordinary this year the issues had been announced in advance \"the aim being to ensure greater transparency and predictability in domestic government debt management both for the state and the participants in the GS market\". Chobanov reminded that from the overall BGN 4.4 billion provided for in the 2014 budget proceeds from issuing new debt around BGN 1.3 billion would be for payment of a maturing debt, BGN 1.7 billion for paying the US$ denominated Global Bonds in January 2015 and the remaining BGN 1.4 billion were to finance the budget deficit.

The macroeconomic stability of the country should go hand in hand with economic growth, but \"I do not rely only on demand for GDP growth, we intend to implement an active policy in respect of supply\", the Minister of Finance commented further. The Public Investment Programme has been set up for the purpose. It is focused on fostering business in the regions and amounts to BGN 500 million. The rules and criteria for project selection and approval are clear and they will be the only factor for approving or rejecting projects of municipalities and ministries, emphasised Chobanov. Another important policy supporting supply is being implemented in education. We have specifically allocated BGN 100 million for it; thereby we will finance programmes for improving the quality of education.