Pensions will rise by 8% next year, public sector pay by 5%, and pay for teachers and other teaching staff by 7.5%, as set out in the budget. Prime minister Rumen Radev announced this today at a Council of Ministers meeting. The government will decide whether to send the 2027 budget plan to the European Commission and the Eurogroup.
"We are planning more revenue, but without changing the main taxes on income, profit and VAT," Radev said. The state wants to collect more money by fighting fraud, putting services online and tracking public spending in real time. The government is also tightening checks on gambling and property deals.
Banks, insurers, retail chains and telecoms will make a one-off payment into the budget next year because of their high profits.
Food vouchers will go up to as much as €200, from as much as €100. The first €100 stays tax-free, while the amount between €100 and €200 will be taxed, as in other EU countries. The minimum wage is also set to go up.
The aim is lower spending, a smaller deficit and less new debt than in 2025 and 2026. To do this, the cabinet will cut red tape in the administration and bring in new pay rules for the public sector. It will cut subsidies for state-owned companies and reform the TELK, the medical panels that assess disability. More than 880,000 people have a TELK ruling, and the number is growing.
"We found the state treasury empty, with an excessive deficit, inherited debts and a neglected Recovery and Resilience Plan," Radev said. He also mentioned unpaid bills and invoices, some of which are still being paid off, the automatic rules for pay rises and fast-growing spending. Radev said the decisions came after careful, precise and tense work, and that the budget will be presented on time.
Families will get higher child benefits, tax breaks for children and for children with disabilities, support for mothers and higher school scholarships. There will be new tax breaks for children's sport, education, science and the arts, and students will get help with food and rent.
Health, education, sport and culture will get more money. The most attention goes to the National Children's Hospital and the pay of young doctors, and spending by the health insurance fund will be checked more strictly.
For businesses, the government is raising the VAT registration threshold, giving tax breaks for technology transfer and research, and offering more help with investment. Industrial zones will get money to build up and to connect firms to the power grid. Radev said the modern economy is a knowledge economy and Bulgarian firms need better conditions, higher productivity and more exports.
Defence spending is rising because of the tense security situation, and all parties in parliament agree on this. Money is set aside for road safety, new firefighting aircraft, remote monitoring of dams, anti-drone systems and air defence. Consulates and trade offices abroad will get more staff and resources.