Банкеръ Weekly

Briefs

EMIGRANTS SENT EUR361MN TO RELATIVES IN BULGARIA

The money sent by Bulgarians working abroad to their relatives in Bulgaria is going to reach EUR1BN within a year or two. According to the Deputy Governor of the Bulgarian National Bank (BNB) Bozhidar Kabakchiev who is managing the BNB Banks Department, this is really possible, considering that even in 2003 Bulgarians who lived and worked abroad sent a total amount of EUR613MN to their families.EUR361MN has been transferred by the middle of 2004, the statistics of the Central Bank shows. That is EUR96MN above the amount transferred in the first half of 2003. Some experts in BNB even think that the money sent by Bulgarians living abroad may reach EUR800 by the end of the current year.In order to explain the significance of this amount, we should note that for the first six months of 2004 the state has received foreign loans amounting to EUR222.3MN. Net revenues from tourism amount to EUR306MN for the same period of time and this sector is considered among the richest currency resources to the state.It turns out that transfers made by Bulgarians who work outside their homeland become a very important item of the country's balance of payment. In fact, there are countries in the world (like Cuba) which currency revenues are almost entirely due to emigrants' money. However, the Bulgarian government should not be proud of such parallels. Moreover, we should not ignore the comparison between the money sent by Bulgarians from abroad and the funds paid by the budget to subsidize the system of public insurance. For that purpose the treasury is going to spend some BGN990MN in 2004 which is equal to EUR506MN. Should transfers from Bulgarians living abroad reach EUR800MN indeed, they will overcome by 37% the budget subsidies for social insurance.A careful analysis of these facts will prove that people registered in the lowest income bracket and therefore receiving budget subsidies actually have a monthly income that goes beyond the lowest working salary in the country. Still, this income is not declared and therefore evades taxation. And this is not fair, as the relief funds paid to people with generous relatives living abroad are provided by the National Social Security Institute. Which is in turn supported by the Bulgarians who still live and work in this country. And because there are fewer people working here every year, the Institute's revenues become less than its expenses. This is also the reason why the Government is not reducing but actually increasing the amount required from companies in Bulgaria as annual social insurance payments. That is why a great part of the businesses are afraid of going out to light and declaring their turnover, while people who still work in Bulgaria hide their labour income. Therefore, it is high time the Government took measures to force the people declare what amounts they receive from abroad. It is not obligatory to make this money subject to taxation, but there is no point in allowing these people to get relief funds, for example. It is also reasonable to transfer part of the social insurance payments made by Bulgarians working abroad to the budget accounts of the Bulgarian state. If this happens, they will contribute to the pensions of their parents as well as to their own ones in case they ever decide to come back to the country.

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