MARIYA MINCHEVA: WE DO NOT HAVE HIGH EXPECTATIONS FROM THE BUDGET IN THE MID-YEAR

From a mid-year budget that generally preserves the existing frameworks that were established with the extension budget, we do not have particularly high expectations for it. This is what Mariya Mincheva – vice president of BIA - said in an interview for BNR. According to her, the debates on the next year's budget will be interesting.

"At the moment, we do not see any change in policies. A mechanical reduction of one number to 3%, which is important for us at least as a political signal that Bulgaria is striving to meet the criteria for the Eurozone - this must happen in a sustainable way, in order not to reach risky situations and a sharp increase in the deficit and debt, which is predicted to grow in the next 2 years," she commented. Mincheva expressed the expectation that the 2024 budget will contain proposals for reforms and to ensure the sustainability of public finances, as well as an environment in which investments will increase.

According to her, the idea of the minimum wage reaching half of the average is a conceptually wrong decision. BIA proposes amendments to be initiated to this article of the Labor Code.

Regarding the government's intention to introduce payment in BGN and euro at the same time, Mincheva expressed the opinion that this is a challenge when the business is not prepared. At least 6 months are needed for practical preparation for such type of changes, she stressed and added that they expect such intentions of the Minister of Finance to be announced after communication with the business, but this has not been done.

"This will require a change in the cash registers, in the accounting systems. All this takes time. And we do not know what the purpose of this proposal is," she said.

According to her, the draft budget is the most restrictive towards restaurateurs: "There are several changes in the transitional and final provisions that are interesting. A large part of them is related to the restaurant industry, which raises questions - why only to it". She commented on the finance minister's ideas related to the restaurant industry. Mincheva expressed concern about paying by bank, because there are not enough ATMs in the whole country. According to her, this will create difficulties for people with the lowest incomes and will affect seasonal employment:

"Before such measures are introduced, it should be ensured that people have the opportunity to have their money in real terms".

When the 9% VAT rate for restaurants was reduced, they made a commitment to increase the amount of the minimum insurance income they pay, recalled the vice president of BIA. And he explained: "The hotel and restaurant sector are in the top 3 of the sectors with the highest growth in total labor costs. The loss from the reduced VAT rate is about BGN 500 million. At the same time, the final consumer prices in the group "Hotels and restaurants" for 2022 registered with us are 51% of the EU average. We question whether the increased receipts from social security contributions and taxes as a result of these increases in remuneration compensate for the forgone benefits of VAT revenue in the budget. In our view, the reduced rate has led to a lightening in the sector".

Now we are keeping what was taken as a commitment by the state, which is correct for us, she added.