Ministry of Finance Expects Excess of Expenditures over Revenues under Consolidated Fiscal Programme for Q1 of 2021
Based on the preliminary data and estimates, the Consolidated Fiscal Programme (CFP) budget balance for Q1 of 2021 is expected to be negative, amounting to BGN 656.5 million (0.5% of the projected GDP).
Key CFP parameters based on preliminary data and estimates:
As of March 2021, CFP revenues, grants and donations are expected to be BGN 11,213 million, or 23.6% of the annual estimates. Compared to the same period of the previous year, tax and non-tax revenues rise by BGN 365.8 million, or by 3.6%. Tax revenues are influenced by the legislative amendments made to the deadlines for submitting the 2020 annual tax returns under the Corporate Income Tax Law, as well as for payment of the corporate income tax, the tax on expenses, the tax on revenues of budget enterprises, as well as the tax due on vessels operation activity (from 31 March to 30 June 2021). In 2020, given the quick measures taken at the outbreak of the pandemic, the Corporate Income Tax Law deadline was also extended, however some of the tax liable persons had already submitted their 2019 returns and had paid an equalising corporate tax payment in the set period, i.e. 31 March 2020.
The Consolidated Fiscal Programme expenditures, including the contribution of the Republic of Bulgaria to the EU budget, are expected to amount to BGN 11,870 million as of March 2021, which accounts for 22.6% of the annual estimates. For comparison, CFP expenditures for the same period of 2020 amount to BGN 9,551 million. The measures aimed at tackling COVID-19 and addressing the social and economic implications of the pandemic have a significant contribution to the growing expenditures in Q1 of 2021. The payments under the 60/40 measure, the 80/20 measure, the Keep Me measure, the Turnover Support For SMEs Affected by the Temporary Anti-Epidemic Measures measure administered by the NRA, etc. have contributed to the growing subsidy expenses for non-commercial enterprises. As to pension expenditures, BGN 320 million have been spent for a monthly allowance of BGN 50 to the pensions of all pensioners for January through March. In parallel to that pension expenditures are also influenced by the increased amount of the minimum old-age pension and of the maximum pension as from the start of the year, as well by the baseline effect of the pension increase in July 2020. There is an increase in health insurance expenditures related to higher expenses for tackling the pandemic and arrangements for financing health establishments in the context of the emergency epidemic situation, including expenses for vaccines, medicines, tests, protective equipment, funds supporting 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. Capital expenditures have also increased in comparison to the same period of the previous year, which is due to payments related to investment projects of the Bulgarian army, road infrastructure sites, etc.
The part of Bulgaria’s contribution to the EU budget, as paid from the central budget as of March 2021, amounts to BGN 479.3 million, which complies with the existing legislation in the area of EU own resources.
The statistical data and the Information Bulletin on the Execution of the State Budget and the key Consolidate Fiscal Programme indicators based on the monthly data on cash execution of first-level spending units as of March 2021 will be published on the website of the Ministry of Finance at the end of April 2021.