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National Assembly
of the Republic of Bulgaria
Parliament adopted at first reading the State Budget Act for 2010
November 17, 2009

The National Assembly adopted at the sitting on November 17, 2009, on first reading, the draft State Budget for 2010.The Draft Budget was adopted with 135 votes in favor and 44 against. The extraordinary meeting of the National Assembly was attended by Prime Minister Boyko Borisov and members of the cabinet .

The 2010 State Budget increases the minimum contributory monthly insurance income for self-employed persons from BGN 260 leva to 420, and for farmers and tobacco growers to BGN 240 as of January 1, 2010. The maximum monthly income for social insurance contributions remains unchanged – BGN 2 000.

The minimum and maximum unemployment benefits remain unchanged as well - 120 leva and 240 leva. The amount of compensation for rearing a child from birth to 2 years of age remains BGN 240 in 2010.

Total employment is expected to decline by 2.5% in 2010

The minimum wage of BGN 240 will be kept the same during the next year.

The Budget foresees people over 75 years old to receive up to BGN 50 as supplement to their pensions. One of the measures laid in the draft budget and projected to have the most profound impact on overcoming the negative consequences of the crisis on employment and incomes of Bulgarian citizens is the reduction of the contributions to the Social Insurance Fund with 2 percentage points, starting 1 January 2010. It is deemed to provide the necessary incentives for businesses to retain the existing jobs, the great advantages of which will benefit low-skilled workers and such in the most affected by the crisis sectors of the economy, is written in the Council of Ministers’ submission report. The 2 per cent contributions cutback in 2010 is divided between the employer -1.1 percentage point and 0.9 percentage points for the worker.

Projected revenues under the consolidated fiscal program for 2010 amount to BGN 26.4 B, 19 per cent less than in 2009 and by around 435 million euro more than the expected collection target as of December 31, 2009. The increase of the revenues in the state budget is projected on the base of rising excise duty rates for certain goods but the budget preserves the rates of the other direct and indirect taxes.

Direct taxes will preserve their rates in 2010. As far as indirect taxes, as mentioned before, the budget provides for the increase of excise duties on certain goods.

The non-tax revenues for 2010 are projected at BGN 3.4 B, which is 11% less compared to the 2009 budget. In 2010 aid mainly coming from of the EU budget, is to be 32 per cent less in comparison with 2009.

The spending priorities of budget 2010 are set at education, health, social sector, environment and road infrastructure.

The expected GDP decline for 2010 is to be 2 percent.

The Budget plans to reduce administrative costs including funds for salaries as of 1 January 2010. The average salary will continue to grow, albeit at a lower pace than in 2008 and 2009.

The allocated contribution of Bulgaria to the common budget of the European Union is 779.7 million euro.

Prime Minister Boyko Borisov, who attended the plenary discussion said that the 2010 budget was actually starting the implementation of the government policy aimed at the European development of Bulgaria. According to him, the draft budget parameters are consistent with the objectives of the government fiscal policy, priorities and anti-crisis measures.
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