10.12.2025
Young people say they want fairness. They are willing to pay higher taxes, but only if there is a clear roadmap explaining exactly how those taxes will be used. The main refrain is the need to improve the economic efficiency of public spending. This was commented by Assoc. Prof. Dimitar Zlatinov, PhD, Vice-Dean of the Faculty of Economics and Business Administration at Sofia University “St. Kliment Ohridski” and Head of the Department of Economics. Assoc. Prof. Zlatinov discussed the economic situation in Bulgaria on Bloomberg TV Bulgaria’s program Business Start, hosted by Hristo Nikolov.
“We have warned many times that we would reach this situation. When you increase social spending, you must be sure you can sustain those payments in the long term. In the absence of incentives for the economy to grow, increasing taxes becomes inevitable”, said Assoc. Prof. Zlatinov.
At the moment, we have strong growth, but if we compare it to what is needed to reach the average European levels, we see that GDP per capita stands at around 65% of the EU average. It is normal to have growth, but it needs to be even higher in order to achieve economic stability.
In 2026, Bulgaria must transition to the eurozone—something entirely new for us. Until now, we were used to pursuing a cautious fiscal policy. Instead of focusing on how we will adapt to the new type of monetary policy and integrate into it, we created tension in fiscal policy. “The focus should be on how Bulgaria will begin to function as part of the common monetary policy”, explained Assoc. Prof. Zlatinov.
“We don’t fully realize what our accession to the eurozone means—this is a global currency, with over 20% of global reserves denominated in euros, along with one third of global trade. For the first time, Bulgaria will be part of such a global mechanism. This is a major opportunity for the country”, he added.
Assoc. Prof. Zlatinov noted that demographic decline is leading to growing pension expenditures. It is normal for those who are working to pay more. A very big problem in Bulgaria is the shadow economy, which conceals the real levels of income. Those who are not part of grey economic mechanisms end up having to pay more, he added.
“It is easier to raise tax rates than to combat the shadow economy, where everything is tied to the judicial system and mechanisms for tracking and control”. On the other hand, Bulgaria’s capital market remains severely limited. “In the past, there were proposals to create a mechanism enabling individuals to purchase government securities in order to stimulate the capital market”, noted Assoc. Prof. Zlatinov.
He also emphasized the importance of keeping the profits of foreign companies within Bulgaria rather than allowing them to be transferred abroad. This is clearly visible in the balance of payments. Capital leaves the country because there are not enough opportunities for development here. It is evident that taxes alone will not keep companies in Bulgaria. Stability in legislation is also essential, Assoc. Prof. Zlatinov concluded.
