KNSB Proposes Changes to the Tax System: Reliefs and Taxes

The Confederation of Independent Trade Unions in Bulgaria (CITUB) has come up with a package of proposals aimed at changes in the tax system. The initiatives were presented during a conference, the discussion topic of which was "Time for Stocktaking: Where Are We with This Tax System?!" The union is calling for a significant review of tax breaks for working families with children.

One of the main proposals provides for an increase in the tax relief for families. According to the proposed changes, the relief for one child would reach 1200 BGN, twice as much as the current 600 BGN. For families with two children, an increase from 1200 BGN to 1800 BGN is proposed. For large families, with three or more children, the union proposes a relief of 2400 BGN, compared to the current 1800 BGN. It is important to note that the CITUB insists that parents be able to take advantage of the tax breaks simultaneously, in full.

In addition to this, the union supports its key demand for the introduction of a non-taxable minimum income for individuals, which should be equal to the minimum wage. In addition, an increase in the tax rate from 10% to 15% is proposed. However, the CITUB admits that achieving these goals at the moment is a challenge. Their position states that "taking into account the challenges facing the budget framework for 2026, its implementation is currently difficult to achieve".

Another proposal from the confederation is to increase the corporate tax from 10% to 15%.

The President of the CITUB, Plamen Dimitrov, also presented the idea of introducing a so-called digital tax. He emphasized that its introduction "will not bring miracles of bravery", as it will primarily affect large multifunctional companies. Dimitrov noted that such a tax already operates in 12 other countries, where it is showing an effect.

Another proposal is the taxation of excess profits, in accordance with the current regulations of European legislation applicable in the financial and gambling sectors. The CITUB points out that such a policy is already being implemented in a number of European countries, including Spain, Italy, the Czech Republic, Lithuania, Hungary, Slovakia and Latvia.

The CITUB also proposes an annual increase in the maximum insurable income, reaching 4625 BGN in 2026. In addition, the union insists on an increase in the insurance contribution in the first pillar of social security by two percentage points. The CITUB admits that this is a "unpopular and difficult decision", but it is necessary "against the background of the growing shortage in the social security system".

An essential request of the CITUB is an increase in personnel costs by 10%, with differentiation depending on underfunded sectors in 2025.

Plamen Dimitrov emphasized the need for a sustainable fiscal policy, while at the same time funds must be provided for wage growth. He concluded with a comment on the need to improve the tax model.