Bulgaria’s Pension Insurance Contributions Set to Rise in 2017, 2018

The National Social Secirity Institute building in Sofia. Photo credit: noi.bg

A medium-term budget forecast now before Bulgarian cabinet calls for freezing the minimum wage for two years after the end of next year as well as increasing the mandatory pension insurance contributions in 2017 and 2018.

The 2017-2019 budget forecast drafted by the Finance Ministry is on the agenda of the weekly meeting of the government on Wednesday.

The mandatory pension insurance contributions will be increased by one percentage point in each of 2017 and 2018 to reach 18.8% for the people born before 1 January 1960 and 13.8% for those born after the end of 1959. The change aims to cut the deficits at the National Social Security Institute as well as the transfers to the NSSI budget from the central government budget.

The minimum wage will rise by BGN 40 (EUR 20) from the beginning of 2017 to reach BGN 460 (EUR 230). The minimum wage, to which some social benefits are pegged, will remain unchanged in 2018 and 2019, according to the budget forecast.

Excise duty on cigarettes is set to rise, which will lead to a rise in cigarette prices by 3.6% on average in 2017 and a further 1.8% the following year.

The budget forecast also calls for a gradual decrease in budget deficit - from  1.4% of GDP in 2017 and 1.0% in 2018 to 0.5% in 2019.

 

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