Finance Minister Simeon Dyankov broke with tradition on October 28, when he chose to compare this year’s Budget to the 2010 Budget bill by showing two pizza boxes – an empty one and one with a small vegetarian pizza, respectively.

In years past, Budget bill photo-ops included Milen Velchev carrying an armoured case into Parliament and Plamen Oresharski using an USB flash drive. Dyankov’s message that the 2010 Budget will be a diet one was hardly misunderstood.

The bill envisions Budget revenue in 2010 at 17 billion leva, a 18.9 per cent decrease over the 2009 Budget adopted by Parliament, which was criticised for setting unrealistic high targets for tax collection and disregarding the risk of economic recession.

Tax revenue in 2010 is envisioned to fall by 19.5 per cent compared to the target set for 2009. Excise duties revenue is the only type envisioned to increase, by 5.9 per cent to 4.5 billion leva, following the Cabinet’s efforts to improve the joint work of the National Revenue Agency and the Customs Agency.

Value-added tax revenue will take the biggest hit in real terms, decreasing by 27 per cent from 9.32 billion leva to 6.8 billion leva. Income tax revenue will fall by 14.1 per cent to 1.97 billion leva and corporate tax revenue is targeted at 1.5 billion leva, a decline of 39 per cent.

Non-tax revenue, which includes income from fees, fines and revenue generated by state property, will fall by 7.6 per cent to 1.76 billion leva.

Central Budget spending was cut by 28.7 per cent to 8.04 billion leva. Payroll spending will fall by 12 per cent to 2.05 billion leva and maintenance funds were scaled back by 23.4 per cent to 2.08 billion, but the bulk of the savings will come from decreased government investment, which was cut by 55 per cent to 1.14 billion leva.

State subsidies to municipalities and other state institutions will increase by 17.4 per cent to 9.7 billion leva. Municipalities will get 8.2 per cent less in 2010 at 2.25 billion leva.

As mayor of Sofia before winning the parliamentary elections in July, Prime Minister Boiko Borissov often insisted that Sofia got a larger government subsidy because it generated the most in taxes, but Sofia city hall will see its allocation drop by 5.3 per cent to 254 million leva.

Most of the increase will go to the pension system, which will get 47.8 per cent more money, 4.83 billion leva. The National Health Insurance Fund (NHIF), which manages the revenue generated by the mandatory health care contributions paid by employers and employees, will see its subsidy increase by 22.4 per cent to 945.6 million leva.

NHIF’s total revenue would go up by 1.8 per cent to 2.52 billion euro, but the funds allocated for health care services were down 15.4 per cent to 1.51 billion leva, according to the summary of the NHIF budget bill for 2010. The brunt of the reduction would be on hospitals, funding for which was cut by 23.9 per cent to 709 million leva.

Defence spending will be cut by a quarter to 890 million leva and the budget of the Interior Ministry will go down by 7.5 per cent to 955.5 million leva. The Labour Ministry will have the third largest budget allocation in 2010 at 799 million leva, 30.3 per cent lower than in 2009. The Agriculture Ministry’s budget is targeted for one of the biggest cuts, 47.2 per cent to 200 million.

The Education Ministry’s budget was cut by 12 per cent to 388.2 million leva and institutions of higher learning will get 8.5 per cent less in state subsidies, 384.5 million leva.

The Regional Development Ministry was the only ministry to receive a major budget boost, a fourfold increase to 310.3 million leva. However, that figure is still lower than the combined 2009 allocation – 385.8 million leva – for the ministry and the National Road Infrastructure Agency, incorporated into the Regional Development Ministry by Borissov’s Cabinet.

The state subsidy for the judiciary was cut by 16.9 per cent to 292.7 million leva, rejecting the Supreme Judicial Council’s (SJC) proposal to increase the subsidy by 32 per cent to 465 million leva. The judiciary’s budget, which is separate from the central Budget, will be 387.7 million leva, down 11.5 per cent from 2009. The SJC asked for an increase of 23.2 per cent to 540 million leva.

The central Budget deficit envisioned after payment of Bulgaria’s contribution to the European Union budget, which will decrease by 17.3 per cent to 780 million leva, will be 1.51 billion leva, compared with a central Budget surplus of 489 million leva targeted in the 2009 Budget.

The gap will be covered through 641 million leva in new debt at home and 671 million leva borrowed from abroad. The Budget bill allows the Cabinet to borrow up to 2.7 billion leva in 2010 and give state guarantees for a further 300 million leva, but public debt should be no higher than 12.2 billion leva at the end of 2010. Public and state-guaranteed debt was 8.1 billion leva at end-August 2009.

Privatisation revenue is targeted at 201.5 million leva, compared to 225 million leva in 2009.