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Low taxes do not solve the state's budgetary problems: CITUB

It's time for a change in the system of taxation and social security contributions, trade union experts claim

Photo: knsb-bg.org

Bulgaria is going to the sixth early parliamentary elections in less than 4 years, and this hinders the constructive debate and the ratification of an important convention prepared by the International Labor Organization (ILO) and accepted by 44 countries around the world. The regulation in question is Convention 190, which is fundamental in the world of labour legislation, primarily because it regulates the issue of eliminating violence and harassment in the workplace. 

Bulgaria has not ratified this convention, as well as the European directive on minimum wages, although the deadline for this expires by November 15 of this year. The reason is again rooted in the lack of a regular cabinet and political instability in this country. The question of the minimum wage and the non-observed deadlines, due to which Bulgaria is subject to sanctions by the EC, was raised during an international conference organized at the headquarters of the Confederation of Independent Trade Unions in Bulgaria (CITUB). It was attended by representatives of 23 countries and 35 trade unions from Europe and Asia. ‎

Isabelle Schomann
"Bulgaria has obligations to reply why the directive has not been transposed and after this reminder, of course the next step will be an infringement procedure", Isabelle Schomann, deputy general secretary of the European Confederation of Trade Unions, warned during the forum in Sofia. "This is the legal way to move forward and force the member states to transpose the directive. It's not like whether or not a member state will like to transpose the directive. It's an obligation. No one is above the law. This obligation is very important because it secures a level playing field in the internal market so everyone plays by the same rules."‎

The most important in this whole process is the dialogue between the three partners - trade unions, employers and the government, pointed out caretaker Labour Minister Ivaylo Ivanov, explaining that for every directive of the EC, and specifically for this one, Bulgaria is threatened with appropriate sanctions. By the end of the calendar year, the directive must be adopted, he added:‎

Ivaylo Ivanov
"But because it seems that the transposition of the directive automatically leads to an increase in the minimum wage, I must emphasize that we are not talking about that. The minimum wage will be accepted by the government as we have defined it. Currently the coordination procedure is under way. But this is not the goal, the goal is that next year and from now on, when a long-term measure is made, it will be done according to the rules that are listed in the Directive. Trade unions propose an increase in the maximum insurance income, not of all incomes."
The tax system in Bulgaria, based on the flat tax, does not allow to finance the costs of social systems, education, healthcare and those to whom the government pays - such as civil servants, those working in culture, social care and all others systems, said CITUB President Plamen Dimitrov. He sees a solution to the problem in the increase of the tax on the maximum insurance income.


"It is important to comment on this topic now, when the parties go to the elections. After that, no one asks them anymore, so we insist that they now give an answer to the question of income taxes. We look forward twenty years from now - to 2045, and we propose an increase in contributions by 1% each year for the Pension Fund in the State Social Insurance and 1% to the second pillar - the capital schemes. Because there is no way with a 5% contribution, in the end, we want to receive a meaningful pension. We see that now the numbers are quite low. We see that from ‎taxes, the budget will be very difficult to compensate for the ‎growing hole due to excessive expenses, including for the National Insurance Institute."‎

According to the trade union, there should be an increase in tax rates in order to supplement, not cut, the budget of the National Revenue Agency for 2025. And this, according to the trade unionists, is not a matter of political choice - there are no left and right interests here, but a matter of calculations and pragmatic decisions that indicate that the increase in taxes is inevitable. But the choice of how to do this is in the hands of politicians in the next parliament and government.


Photos: BTA, knsb-bg.org


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