The organizations representing the high-tech business, including:

-Association for Innovation, Business Services and Technology -  AIBEST;
-Alliance of the Technology Industry - АTI;
-Bulgarian Association for Information Technologies - BAIT;
-Bulgarian Association of Software Companies -BASCOM;
-Bulgarian Entrepreneur Association - BESCO;
-Bulgarian Employers' Association of Innovative Technologies -BRAIT ;
-ICT Cluster,
we express our categorical position against the introduction of an automatic formula for the annual increase of the maximum insurance threshold (MOD).

We are surprised that the subject of the increase in the MOD is raised once again in the absence of any strategy to meet the challenges facing our industry and analysis of the overall effect on the Bulgarian economy.

We believe that the government shares the understanding that it is strategically important for Bulgaria to create a good environment for the development of high-tech business, which is export-oriented and has a key role in the formation of the middle class and the achievement of greater growth of the gross domestic product of our country. Building this environment is a complex topic related to improving access to investment, improving the regulatory framework and improving access to highly qualified personnel, including the much-needed reforms in the education system. A competitive and regulated tax-insurance system is an important part of the overall framework in which business develops.

Thus, the automatic formula proposed by the Ministry of Finance for the annual increase of the MOD, especially in a variant that represents a coefficient of the average salary for the country, risks quickly and irreversibly taking away the competitiveness of the Bulgarian high-tech sector, as well as of all other sectors that operate transparently , make a significant contribution to the national budget, paying the highest taxes and insurances, retain talent in the country and provide high added value for society.

Despite the serious growth of high-tech industries, which are already responsible for more than 20% of the country's gross domestic product, the costs of our companies have been increasing in the last two years by more than 30% on an annual basis. Against this backdrop, being tied to an automatic formula will not only fail to provide the vital normal business environment, it will also take away the possibilities for flexible policy in the dynamically changing conditions we are undoubtedly facing. It is also possible that the number of newly opened jobs will decrease, because some high-tech companies may move to other countries in search of a more attractive and, above all, regulated business environment.

The introduction of an automatic formula for the annual increase of the MOD will have a negative impact on both the costs of employers and the net remuneration of each high-tech specialist. We would like to remind you that even at the moment, everyone employed in our sector pays taxes and insurance, which are twice the national average.

According to a nationally representative survey by the Guidance Agency, more than a third of young people are oriented towards education and a career in this field. The IT and telecom sector undoubtedly has a growing share of representativeness of the interests of young people and is the key to dealing with the demographic crisis. Increasing the tax burden on IT and telecom talent is a counterproductive and dangerous message to the highly educated and highly qualified professionals who chose to stay in Bulgaria and be the engine of consumption in a number of sectors of the economy.

At the same time, there has been a hunger for talent and migration in our industry for at least 10 years. The remote working method imposed by the COVID pandemic further worsens the situation, because our IT specialists can even more easily work for companies from more developed economies around the world, i.e. they migrate to foreign employers without having to relocate.

This will undoubtedly reflect negatively on the role of the IT industry in supporting the process of digitization of the Bulgarian economy and society, whose accelerated development is a priority in the NPVU (the DESI index and the country's penultimate place).

Against this background, it is good to think about how to stimulate the development of the high-tech industry by developing tax reliefs, to encourage its contribution to the digital transformation of the Bulgarian economy, to increase investments in innovative developments, and why not to think about a differentiated approach to reducing (or exempting for a certain period) insurance and general income tax in the industry, as in a number of other Eastern European countries.

Our call is for the government to abandon the initiative to introduce an automatic formula to raise the maximum insurance threshold every year. We appreciate that the conversation continues and believe it is crucial to understand that the fight against high inflation is not yet over and we have not achieved the economic stability that better planning of the country's tax-insurance policy would help.

We appeal, before discussing any increase in the MOD, to propose a number of more effective concrete measures to replenish the treasury and improve the welfare of Bulgarian citizens, such as:

-Highlighting entire sectors of the Bulgarian economy;
-Keeping talent in the country;
-Building and promoting the "Bulgaria" brand abroad in order to attract investments;
-Promoting us as a country of Artificial Intelligence development and focus on preventing possible negative consequences on the labor market;
-Provision of education adequate to the needs of the business;
-Creation of adequate conditions and targeted policy in the field of health care and social services, increasing the quality of life of all Bulgarians;
-Preventing the demographic catastrophe through consistent and targeted measures and policies; Restoring the rule of law;
Development of sectoral policies - especially those aimed at the sectors that work for export, as they are a source of permanent transparent income in the country's economy.

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An open letter from employer organizations, entrepreneurs and business representatives

Dear leaders of political parties and candidates for people's representatives, participants in the upcoming elections on April 2, 2023,

We are entering the fifth election campaign for the National Assembly in the last two years. In this period, political parties always seek contact with business and declare their support for the main priorities of entrepreneurs, employers and branch organizations.

The last four Parliaments had an average length of existence of about 100 days. It is understandable that most of the promises that were made by politicians to business could not be fulfilled, but the postponed topics important for Bulgarian business and for the economy of Bulgaria are turning from important into urgent, urgent, and in the current geopolitical situation - into defining ones for the development of the country and for the future of all.

We say that real commitment and support for business and the economy on the part of you politicians will be measured in the coming months by your willingness to form a sustainable government that will do its job to solve the critical issues and challenges facing our country.

Those politicians who are not up to the task of providing a functioning government to carry out the much needed reforms will give a clear signal that business, the economy of Bulgaria and the improvement of the welfare of Bulgarians are not their priority.

In the last two years, we have been going through a series of crises that have rarely occurred simultaneously in human history in such a way: pandemic, war, energy crisis, inflation, geopolitical and local political crisis, and crisis of confidence.

In 2023, however, along with the crises, historic opportunities open before us. We will witness a transformation of the world that can be compared to the entry of the Internet into our lives at the end of the XX and the beginning of the XXI century. The breakthrough in the development of artificial intelligence presents us with challenges and opportunities that will bring prosperity to the countries that manage to respond adequately to the changes, and will put at a disadvantage all those who miss the moment when they have to adapt to the new realities.

The war in Ukraine is causing another rearrangement of the market, supply chains and productivity structure in Europe. After the end of the war, the reconstruction of Ukraine will begin, which, according to general opinion, will be the biggest economic project in Europe. Only with a regular government can Bulgaria be an active participant in this process and make leaps forward that will provide higher added value to our business and prosperity for more Bulgarians. Without a government, we risk being passive observers again, but we will have an even more uncompetitive economy and we risk condemning many of our compatriots to more poverty.

We believe that any political party that claims to be pro-business and committed to economic development should take all necessary steps to make progress in the following areas:

1. The fastest possible acceptance of Bulgaria into the Eurozone and Schengen

Anyone who has tried to attract an investor, client or employee from abroad has faced Bulgaria's negative reputation. Our joining the Eurozone and Schengen stand at the foundation of building trust and a better name for Bulgaria in the world.

Our joining the Eurozone is not supported by a single country in the European Union - Bulgaria, which is not making enough efforts to make this happen. We believe that the Eurozone is also the shortest way for us to join the Schengen area, which is not only a political and security issue, but also has business implications.

Bulgaria remaining outside the Eurozone and Schengen places a stigma on business and on us Bulgarians, which will be an obstacle for the development of our economy and the possibility for more Bulgarians to live better for a long time.

A regular government is needed to implement all the long-delayed reforms so that our country can be accepted into these two strategic alliances. Going through each new cycle of new elections and caretaker governments irresponsibly and with impunity takes us away from the Eurozone and Schengen goals and will weigh on the economy and image of Bulgaria in the future.

A regular government is needed, which will lead an adequate policy in the interest of Bulgaria and the choice we made decades ago - to be part of Europe and the democratic and free world. The responsibility is historic and political parties must put aside their short-term intra-party interests and personal egos to give our country any chance of prosperity as a full member of the European family. Otherwise, we doom ourselves to generations of degradation, apathy and pathlessness.

2. Implementation of the necessary legislative and administrative reforms to guarantee the rule of law in our country

Issues related to improving the judiciary and the rule of law go beyond our country and the environment for doing business here. Entrepreneurs and companies experience constant difficulties because of Bulgaria's negative reputation and mistrust of justice institutions. It is obvious that we cannot be a preferred partner for global investors with so many scandals involving our judicial system.

We call on politicians to prioritize the implementation of reforms related to the judicial system, because this will not only signal that Bulgaria is ready to improve the environment for doing business and investing, but it is also necessary to be able to advance in the negotiations related to The Recovery and Resilience Plan, as well as with our acceptance into the Schengen area.

    3. Mandatory reforms in Bulgarian education

70% of employers have serious problems with finding staff. The Bulgarian education system does not meet the needs of modern society and business. And 47% of learners end up as functionally illiterate people who do not have the necessary skills and knowledge to build a successful or at least a normal life. Business is forced to build its own academies and educational institutions, to finance and take over functions from which the Bulgarian education system has practically abdicated. For companies, this is a huge additional investment, which is taken over by the business in order not to pay the bigger price - the shortage of personnel.

The demographic crisis and the outflow of talents and young people abroad is the biggest challenge facing Bulgaria. The lack of people today is a topic for absolutely every industry in our country. Bulgarian business is placed in a much more disadvantageous position than its competitors around the world. The development of the labor market is not a priority for any party in our country.

The strategies and legislative changes in the field of education and the labor market that need to be developed and adopted are such significant issues that they need to be a cross-party priority for all politicians.

4. Ensuring functioning regulators and institutions

Several Parliaments in a row have failed to elect the leaders of a number of regulators and institutions, and people from the past, with expired mandates, remain in key positions.

The absence of government creates an environment of uncertainty that prevents institutions from doing their jobs. The failure in the elections of the leadership of key regulators leads to the blocking of entire sectors of the economy. We believe that the election of the heads of the regulators should be a priority in the program of the next National Assembly.

Without institutions with the necessary capacity and expertise and without working regulators, Bulgaria is irretrievably lagging behind and working with an agenda from the past. Bulgarian entrepreneurs and employers are ready to support the administration and we have proposals to help the transformation of the country.

5. Guaranteeing the funds from the Recovery and Sustainability Plan

Despite the stated desire, the 48th National Assembly failed to deal with the adoption of the necessary laws to initiate reforms and to guarantee the funds from the Recovery and Sustainability Plan (RPS). We believe that if the reforms and funds to support our economy under PWU are of the utmost importance, as declared by the political parties, they must find a way to have a government and a National Assembly with a long horizon, and also show determination to realize.

6. Improving the conditions for encouraging investors

Bulgaria lags behind significantly in its policy for attracting and retaining investors. More and more often, our country is not even among the possibilities considered in the region, and investors prefer Romania, Greece, Serbia, Turkey. Neighboring countries have much more determined, sustainable and effective policies to attract and retain investors. The Investor Promotion Act does not simply need to be revised. We need a comprehensive policy of our country in this area, which corresponds to modern realities, economic trends, and competition on a global scale.

The solution is to improve policies for attracting foreign investors by: introducing an objective point system for determining the level of direct financial incentives for production investments; reducing and simplifying thresholds for investor qualification; qualification of the regions in Bulgaria according to the level of development in terms of unemployment rate and average salary. These measures are extremely urgent and even belated, because Bulgaria's neighboring countries manage to attract many investments

Serbia has managed in recent years to attract several significant projects for over EUR 100,000,000 (electric car engine plants, tires and auto components) and several for over EUR 1,000,000,000, as well as numerous smaller ones. One of the main reasons for these successes is that the average regional state aid granted to investors in countries such as the Czech Republic, Slovakia, Hungary, Serbia and Romania is between 15–45% of the investment made. In Bulgaria it is below 3%.

It is time to turn Bulgaria into a good place to live, with high standards, a place for honest and free business, a preferred destination for investments, a country with a vision for the future and with a real legal order, to return to people the feeling that there is justice. We appeal to all political forces for more reason, wisdom and courage - it is time for a regular government, a government of unity for the sake of Bulgaria's future.

Association for Innovation, Business Services and Technology (AIBEST)

Bulgarian Association for People Management (BAUH)

Bulgarian Association of Communication Agencies (BAKA)

Bulgarian Association of PR Agencies (BAPRA)

Bulgarian Association of Software Technologies (BASSCOM)

Bulgarian Association for Information Technologies (BAIT)

The Bulgarian Entrepreneur Association (BESCO)

Bulgarian Employers' Association of Innovative Technologies (BRAIT)

The Bulgarian Fintech Association

Interactive Advertising Bureau Bulgaria (IAB Bulgaria)

ICT Cluster

Family Business Association - Bulgaria (FBN Bulgaria)