2026 Budget in the Parliament in Bulgaria: Taxes and Minimum Wage Are Increasing

The Budget and Finance Committee of the Bulgarian Parliament has started discussing the state budget draft for 2026. This comprehensive economic plan, prepared and submitted by the Council of Ministers, covers not only the central state budget but also the budgets of the State Social Security and the National Health Insurance Fund. Lawmakers have very limited time to evaluate the amendment proposals on the draft and to vote on the final text. Following the completion of the first reading, the requests for changes between the two readings will be addressed, and the final bill will be clarified. The government's main goal is to ensure that this critical plan, which determines the country's financial framework, enters into force on 1 August 2026.

Macroeconomic indicators for the upcoming year signal that the country will face a significantly high budget deficit. Accordingly, the budget deficit is planned to be realized at 5,7 percent of the Gross Domestic Product (GDP). It is noted that this rate corresponds to a massive economic deficit of approximately 7,2 billion euros. To finance the deficit, the government anticipates new state borrowing, which will increase the country's total liabilities. As a result of this new borrowing, the country's total state debt is expected to reach 37,7 billion euros, corresponding to 31,1 percent of the GDP.

One of the most important items that will directly affect the economic welfare of the public is the regulation regarding the minimum wage. According to the plans reflected in the government's budget draft, the minimum wage in the country will be increased to 620 euros. This increase aims to provide a significant improvement in the salaries of the lowest-income workers. However, alongside the wage increase, various legislative regulations aimed at increasing state revenues are also included in the package. These economic measures contain significant changes through the social security system, which directly affects employees.

In order to fill the state treasury and close the budget deficit, the government plans to implement a series of comprehensive revenue-increasing reforms. In this context, the maximum insurable income, which is the upper limit for calculating social security premiums, will be increased to 2.300 euros. Additionally, there will be a general increase in the minimum insurance thresholds applicable to certain economic activities and professions. Experts expect this step to directly impact both employer costs and the processes of combating informal employment. Along with these regulations in the insurance base, the government is trying to guarantee the state's regular revenues.

Another important pillar of the strategy to close the budget deficit consists of increases in taxes, fees, and excise duties. Within the scope of the new economic plan, a price increase of about 30 percent is foreseen for traffic insurance and highway tolls (vignettes), which are mandatory for vehicle owners. Furthermore, the excise duty applied to tobacco products will be rearranged in a way that makes cigarette prices even more expensive. Government officials argue that the additional revenue increase from these items will play a critical role in balancing the social security and health budgets. However, it seems inevitable that the increases in these items will cause intense debates during the parliamentary discussions of the budget, which is still in the approval stage.