The Bulgarian Socialist Party, which leads the ruling three-party coalition government, has announced an ambition and populist plan for lower taxes and higher pensions now that the country has entered the European Union.

The socialists propose that the tax imposed on the people with the lowest incomes is reduced from 20% to 16% as of 2008. Under the scheme a tax of 14% will be imposed on a salary of BGN 800 and 25,4% on a salary of BGN 2,000.

They insist that the government stick to the policy for increasing social security contribution thresholds and plan the minimum pension for old age to equal at least 50% of the minimum wage.

The socialists plan a steady trend of over 6% of economic growth to continue.

"We will not put up with the fact that Bulgaria remains one of the poorest countries in the European Union," the prime minister Sergey Stanishev said.

The proposals are yet to be discussed by the coalition leaders.

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