Flat tax rate remains unchanged.

Only the health insurance rate will increase from 8 to 10%, which will be approved by the cabinet on Wednesday

The government is not considering raising the 10-percent flat income tax by 2 pp, deputy finance minister Ana Mihaylova said, refuting media publications. Only the health insurance rate will increase from 8 to 10%, which will be approved by the cabinet on Wednesday. The legal amendments will then be voted in parliament. The higher health insurance contribution will become effective from April.

The higher insurance will boost the budget of the National Health Insurance Fund by BGN 300 million. The news about the rate increase triggered a wave of discontent among entrepreneurs. Some economists, though, say the decision is a prudent move. It is better to raise the health insurance rate than risk the country's fiscal stability, UniCredit Bulbank chief economist Kristofor Pavlov told the Pari daily. It is important to reform the healthcare system first and only then seek ways for financing, Centre for Economic Development chairman Georgi Prohaski commented.