31.12.2021

Based on data from the monthly reports on the cash performance of the budgets of first-level spending units, the budget balance of the Consolidated Fiscal Programme (CFP) on a cash basis as of November 2021 is positive, amounting to BGN 638.7 million (0.5 % of forecast GDP), and is formed by an excess of revenues over expenditures under the national budget of BGN 806.6 million and a deficit under EU funds of BGN 167.9 million.

The CFP revenues, grants and donations as of November 2021 are to the amount of BGN 47,779.2 million, or 94.5 % of the revised annual estimates^[1]. Compared to the same period of the previous year, proceeds as of November 2021 have grown by BGN 8.1 billion, or 20.4 %. The growth as compared to the previous year is due to the higher tax and non-tax revenues which increased by around BGN 7.4 billion, while the receipts in terms of grants and donations increased by BGN 0.7 billion as compared to those reported for the eleven months of the previous year. The higher tax revenues in November were also influenced by the legislative change that has shifted the deadline for the corporate income tax prepayments, given the changed deadline for submitting the declarations for changes in the prepayments in 2021 under Article 88 of the Corporate Income Tax Law (15 November). During the month, an amount of BGN 450 million with a one-off effect for the year was also received, which represents grants provided by Kozloduy nuclear power plant to the state budget in execution of Council of Ministers’ Decision № 739/2021 on the approval of the programme for compensation of end non-domestic electricity customers. Given the necessary technological time for processing the payments under the programme, the respective expenditures on the payment of compensations will be made almost entirely in December, which, respectively, leads to a one-off improvement of the budget balance for November due to the received revenues.

Tax proceeds under CFP, including revenues from social security and health insurance contributions, total BGN 37,340.2 million, which is 94.7 % of the annual plans. Proceeds from taxes and social security and health insurance contributions have grown by BGN 5.3 billion (16.6 %) compared to those reported for the same period of the previous year, forming 78.2 % of the overall CFP proceeds for the period.

Revenues from direct taxes amount to BGN 7,701.9 million, or 100.2 % compared to the annual estimates. Indirect tax revenues amount to BGN 17,293.6 million, (95.0 % of the annual estimates), with VAT revenues amounting to BGN 11,806.4 million (96.2 % of the plans), excise duty revenues – to BGN 5,175.0 million (91,7 % of the estimates), and customs duty revenues – to BGN 264.1 million (109.5 % compared to the annual estimates). Proceeds from other taxes, including property taxes and other taxes under the Corporate Income Tax Law, amount to BGN 1,300.7 million, or 104.5 % performance of the annual estimates. Revenues from social security and health insurance contributions are BGN 11,044.1 million, or 89.9 % of those planned for the year.

Non-tax revenues amount to BGN 7,348.0 million, which accounts for 108.8 % of the annual estimates, and are mostly formed by revenues from state, municipal and legal fees, revenues from rents, concession revenues, greenhouse gas emission allowance revenues, etc. Revenues to the amount of BGN 660 million (VAT included) with a one-off effect for the year were received in April 2021; this is the initial concession fee paid to the state from the concession of Sofia Airport.

Proceeds from grants and donations amount to BGN 3,091.0 million.

The expenditures under the CFP, including the contribution of the Republic of Bulgaria to the EU budget, amount to BGN 47,140.5 million as of November 2021, which is 85.4 % of the revised annual estimates. For comparison, the expenditures under the CFP for the same period of 2020 amounted to BGN 39,912.5 million. The significant growth of expenditures as of November 2021 compared to the same period of the previous year is related, on the one hand, to the lower base in 2020 when, during the same period, the expenditures on addressing the COVID-19 pandemic were lower, while as of November 2021 these expenditures are significant, and, on the other hand, to the income policy, the policies in the social sphere and the higher expenditures on the administration laid down in the 2021 State Budget of the Republic of Bulgaria Law.

Looking from the perspective of economic elements, the most considerable growth is registered in social and health insurance expenditures. In the area ofpension expenditures, BGN 1.4 billion were spent on payment of an allowance to the pensions of all pensioners (with the allowance amounting to BGN 50 for the months from January to September, and to BGN 120 for October and November). In addition, pension expenditures were also influenced by the increase in the amount of the minimum contributory-service and retirement-age pension and of the maximum amount of the pension as from the beginning of the year, a baseline effect of the increase in pensions in July 2020, as well as the increase in July 2021. In the area of health insurance expenditures, these report an increase related to higher expenditures on tackling the pandemic and arrangements for financing health establishments in the context of the emergency epidemic situation: expenditures on medicines, tests, consumables and protective equipment, funds to support front-line staff in the fight against COVID-19 (supplementary monthly remuneration of BGN 1,000), payment to medical staff for vaccination of the population against COVID-19, monthly allowance of BGN 600 for doctors, BGN 360 for nurses and midwives and BGN 120 for hospital attendants, etc. The payments under the 60/40 measure, the 80/20 measure, the “Keep Me” measure, the “Working Capital Support For SMEs Affected by the Temporary Anti-Epidemic Measures” measure administered by the NRA, etc., have contributed to the growing expenditures on subsidies for non-financial enterprises.

Expenditures increased significantly in the last months of the year as, in addition to the traditionally higher expenditures related to the winter period, funds have been provided for the main part of the additional expenses for tackling the pandemic, social support, protection from migratory pressure at the borders, support to businesses and other priority measures to be implemented by the end of the year, which were approved by the National Assembly in mid-September with the adopted Law Amending and Supplementing the 2021 State Budget of the Republic of Bulgaria Law. The payments under the programme for compensation of end non-domestic electricity customers, as approved by the government, is also to be made in the last month of the year.

Non-interest expenditures for the past eleven months of the year amount to BGN 45,007.1 million, which is 88.2% of the annual plan. Non-interest current expenditures amount to BGN 41,895.0 million. Capital expenditures (including net increment of state reserve) amount to BGN 3,071.2 million. The current and capital transfers to other countries amount to BGN 40.9 million. Interest payments amount to BGN 586.0 million, or 89.2 % of those planned for 2021.

The part of Republic of Bulgaria's contribution to the EU budget, paid from the central budget as of 30.11.2021, amounts to BGN 1,547.4 million, which complies with the current legislation in the area of EU own resources.

Fiscal reserve as of 30.11.2021 is BGN 12.8 billion, including BGN 12.5 billion fiscal reserve deposits in BNB and banks and BGN 0.3 billion receivables under the EU Funds for certified expenditure, advance payments, etc.

The Consolidated Fiscal Programme performance data as of 30 November 2021 are published on the website of the Ministry of Finance in Statistics section. The statistical data are accompanied by an Information Bulletin on the Execution of the State Budget and the main indicators of the consolidated fiscal programme, which presents a short analysis of the performance of the key budget parameters on a consolidated level and by constituent budgets.

^[1] Estimates to the 2021 State Budget of the Republic of Bulgaria Law (prom., SG No 104 of 08.12.2020; amended, SG No 77 of 16.09.2021).