The budget bill 2008, put up by the Finance Ministry for interdepartmental review, contains no surprises to the business and public community alike, Dnevnik business daily reported on October 25. Its main features will be the introduction of flat tax for legal and natural persons at 10 per cent and a tighter fiscal discipline.

The estimates draw upon weighted average inflation of 6.9 per cent, and a record-high current account deficit of 21.9 per cent of the gross domestic product (GDP). The Finance Ministry will be looking forward to a 3 per cent of GDP budget surplus.

The bill also foresees a wage hike of five to 10 per cent as of July 1 next year.

Regarding taxation, there will be three tax rates for freelancers – at 10, 25 and 40 per cent. To date the range of tax reliefs was between 10 to 70 per cent.

Employees in public administration earning less than 430 will get one-time payment to recompense for losses stemming from flat tax introduction.

Starting next year, the minimum taxable income will increase by 20 leva to 240 leva. The ministry plans to raise the threshold by 10 leva increments within the next couple of years. The maximum taxable income will, meanwhile, go up from 1400 leva to 2000 leva through 2010.

Meanwhile, the finance ministry has ceded to the request of Bulgaria's tobacco company Bulgartabac to make one of three excise on cigarettes hike to align Bulgaria's to those of the EU.