Bulgaria is set to cut its Budget deficit to 0.5% of its gross domestic product (GDP), according to the government's 2012-2014 plan approved on Wednesday.
Fiscal policy should be based on low taxes, limited redistributive role of the state and subject to limitations imposed by the Stability and Growth Pact, the government's media office said.
The country's budget gap is forecast to shrink to 1.5% of GDP in 2012 and to contract further to 1% in 2013 and 0.5% in 2014.
In 2010, the deficit was 3.9% of GDP, or BGN 2.86 billion, BGN 500 million less than the figure stipulated in the budget revision in July.
The government plans to reduce the shortfall by keeping direct tax rates unchanged, gradually increasing some excise duty rates to comply with the EU minimum levels and boosting tax collection.
It also hopes that the anticipated sustainable recovery in the development of global and European economies in the mid-term will have a positive impact on the country's economy, providing for a growth of 3.6% to 4% between 2012 and 2014. /Source: Dnevnik/