Position on the 2022 Budget by the leading industry organizations in the field of high technologies

Subject: Second reading votes in the National Assembly on the State Budget Act of the Republic of Bulgaria for 2022

In connection with the adopted State Budget Act of the Republic of Bulgaria for 2022, we, the representatives of the leading industry associations in the field of high technologies – the Association for Innovation, Business Services and Technology (AIBEST), the Bulgarian Association of Information Technologies (BAIT), the Bulgarian Association of Software Companies (BASSCOM), the Bulgarian Startup Association (BESCO), the ICT Cluster Foundation, and the Bulgarian Employers Association for Innovative Technologies (BRAIT), express our firm position that we do not support the decision to increase the maximum social security income threshold to BGN 3,400 as of April 1, 2022, and at no point have we expressed agreement with this measure.

We believe that before such important decisions, which directly affect the high-tech industry, are taken, they should be discussed with the sector in advance, rather than initiating dialogue post factum with the expectation that the business community will validate an already adopted government decision. Although the increase in the maximum insurable income is once again being introduced without analysis, without impact assessment, and without any improvement in the quality of the social services for which higher contributions will be paid, we will continue to participate in the dialogue aimed at developing a predictable mechanism for calculating the maximum insurable income in the future.

We remain steadfast in our insistence that serious reforms be initiated to achieve higher economic growth and increased incomes for employees, respectively leading to higher revenues for the state budget. It is also of key importance that a larger share of businesses pay their taxes and social security contributions correctly, following the example of companies in the information technology sector, a sector that is an undeniable symbol of full transparency in revenues and expenditures.

We have proven our ability to invest and allocate resources far more effectively than the state administration in development, in creating new and well-paid jobs—development that generates more revenues, taxes, and opportunities for their use in social activities. We expect, through joint efforts, to achieve:

• Attraction of highly qualified specialists and support for regulating the status of their families; support for foreign students from third countries who have graduated from Bulgarian higher education institutions to more easily obtain work permits;
• E-government and minimization of the need for businesses and citizens to interact in person with institutions;
• Education adapted to the rapidly changing world and labor market; encouragement of research and development (R&D);
• Modernization of outdated legislation affecting business (remote work, electronic employment records, etc.).

The knowledge-based industries have consistently fulfilled their obligations to the state. High-tech companies form a significant part of the middle class and contribute to the sustainable development of the Bulgarian economy—now more than ever. These businesses attract highly educated talent, encourage the return of Bulgarians educated and established abroad, and draw foreign professionals who choose to build their careers, families, and lives here.

Our companies are a source of national pride through their innovative solutions operating in global markets under conditions of free competition. They are ambassadors that brand our country as an attractive destination for business and innovation. Moreover, businesses in this sector do not seek subsidies or financial assistance from the state, but rather a purposeful dialogue about the future of Bulgaria. It is no exaggeration to say that this future is a matter of civilizational choice, and we rely on the current Bulgarian government to make the same choice— a digital, not an analog Bulgaria.

Increasing obligations to the state specifically for the high-tech sector, which drives growth, innovation, and overall digitalization, sends a negative signal about the future of the Bulgarian economy and the sustainability of the sector, which we urge not to be taken for granted.

Association for Innovation, Business Services and Technology (AIBEST)

Bulgarian Association of Information Technologies (BAIT)

Bulgarian Association of Software Companies (BASSCOM)

Bulgarian Startup Association (BESCO)

ICT Cluster Foundation

Bulgarian Employers Association for Innovative Technologies (BRAIT)