The ruling coalition in Bulgaria has officially proposed to remove several contentious measures from the draft 2026 budget, including increases in social security contributions, the dividend tax, and the mandatory use of the Single Use of Fiscal Cash Registers (SUPTO). Finance Minister Temenuzhka Petkova announced the decision during a meeting with social partners at the Finance Ministry, attended by MPs from the DPS-New Beginning, employer representatives, and Prime Minister Rosen Zhelyazkov. The meeting aimed to resolve tensions following recent mass protests demanding the government’s resignation.

Prime Minister Zhelyazkov acknowledged the delayed dialogue, saying that the dispute would be challenging but that careful discussion could yield a balanced solution. “The important thing is not to proceed under the pressure of time. If we meet societal expectations, we can reach a new solution,” he stated.

Employers’ representatives, led by Rumen Radev of the Bulgarian Association of Employers and Employees (AIKB), outlined key demands: canceling the 2% social security contribution increase for the pension fund, scrapping the 10% dividend tax, abolishing mandatory SUPTO, lowering the maximum social security income from 4,600 leva (≈2,350 euros) to 4,430 leva (≈2,270 euros), and reducing expenditures in education, the judiciary, state administration, and the capital program. Radev also highlighted the need to address imbalances in salaries across security sectors and underfunded state agencies. He supported selling unproductive state assets, concessions in struggling companies such as Sofia District Heating and Bulgarian Railways, and reforms in the pension system.

Dobri Mitrev from the Bulgarian Industrial Association emphasized preserving the current tax and social security model until a clear national reform strategy is in place. “We must spend as much as we earn. In years of growth, we should save for rainy days,” he said. Plamen Dimitrov, president of the Confederation of Bulgarian Trade Unions and Employers, stressed that the protests were focused on workers rather than specific groups and called for a fair horizontal income policy with a 10% salary increase in key sectors. He highlighted urgent needs in transport, postal services, and other public institutions.

Finance Minister Petkova confirmed that the SUPTO measure, which would have generated 320 million euros, and the dividend tax, expected to yield 340 million euros, will be removed. She noted that the coalition also intends to reconsider the proposed social security increase, initially estimated to bring in 601 million euros, and the maximum insurance income adjustment, estimated at 231 million euros. “We will not take on new debt and will explore options in capital expenditures and revenue streams to balance the budget,” she said.

The Ministry of Finance’s review will focus on essential capital projects, including defense spending to maintain NATO commitments, regional development, and transport infrastructure, totaling over 2.1 billion euros. Petkova highlighted the government’s achievements over the past 11 months, including eurozone admission and renegotiation of the Recovery and Resilience Plan, which will deliver more than 1.5 billion euros in the next EU payment.

Prime Minister Zhelyazkov underlined the government’s commitment to optimizing the administration. He stressed that vacant positions will be carefully examined for fiscal efficiency and that reforms aim to create an effective, well-paid workforce without mass layoffs. Mitrev reiterated that employers seek quality administration, not large-scale cuts, and advocated targeted optimization where necessary.

Negotiations between the government, unions, and employers are ongoing, with the coalition aiming to satisfy core demands while maintaining fiscal balance. Petkova noted that nearly 1.5 billion euros in previously planned revenue measures will need to be compensated through careful review of expenditures and revenue adjustments, ensuring the new budget aligns with societal expectations and economic realities.