V. Gugushev on Bloomberg: With the budget for 2026, Bulgaria Is Losing Its Competitive Advantage

During the past year and a half, we have observed that many Romanian companies are trying to open representative offices in Bulgaria and bring their businesses and services across the Danube. This strengthened Bulgaria’s competitive advantage over Romania. With the measures proposed in the 2026 budget — expected to be adopted without any dialogue with the business community — the country is now losing that competitive edge. This was stated by lawyer Victor Gugushev, Chairman of the Bulgarian-Romanian Chamber of Commerce, in the “Development” program on Bloomberg TV Bulgaria, hosted by Antonio Kostadinov.

“The positive expectations we once had regarding the adoption of the euro are now fading, and we are facing negative expectations for the coming year,” he noted, adding that business challenges will deepen, as increases in the tax and social security burden are planned not only for 2026 but also for 2027 and 2028.

As the main red line in Budget 2026, Gugushev pointed to the lack of any willingness to undertake reforms. Civil servants should receive decent pay, he said, but the administration must operate as efficiently as possible.

“Politicians are not undertaking any reforms and are not planning any. This only deepens the growing crisis from a budgetary point of view.”

Risky changes in the tax system
Bulgaria is a tax haven — in the best sense of the word — with a very balanced policy and fixed tax rates. There is no progressive taxation in the country, which creates opportunities for medium- and long-term business planning, he commented.

He recalled that this stability benefited Bulgaria for many years, helping attract major IT and outsourcing companies — sectors that have been essential to the Bulgarian economy over the past 10–15 years.

“For many years our tax system remained stable, without drastic changes. Now, after repeatedly stating that no changes were planned, major reforms are suddenly being introduced with the very first European budget. This alone is a serious challenge and carries inherent risks.”

Gugushev expects changes in taxation and social security contributions — as well as plans for further increases — to undermine competitiveness and discourage potential investors in Bulgaria.

Positive effects of Schengen membership
The accession of Bulgaria and Romania to Schengen is an important milestone for both countries, bringing positive effects for both short-term and long-term tourism, he noted.

“The official opening of the winter season is coming next month, and Romanian tourists are important not only for the summer resorts and the Northern Black Sea coast, but also for the winter resorts,” Gugushev said.

Schengen membership also benefits Bulgarian companies exporting fast-moving goods to Romania, as it reduces border waiting times — previously a significant obstacle.

“The key point for the connection between Bulgaria and Romania remains the Danube Bridge near Ruse. Its repair has been ongoing for the second year. However, a few weeks ago we met with the regional governor of Ruse, who assured us that the repair is progressing on schedule and delays are not expected.”

The renovation is expected to be completed at the beginning of the next summer season, allowing Bulgarian citizens to travel to Romania with greater ease, Gugushev said. However, he emphasized that alongside building new bridges, supporting infrastructure must also be considered.

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Watch the full commentary in the video: https://www.bloombergtv.bg/a/17-v-razvitie/152499-s-merkite-v-byudzhet-2026-balgariya-gubi-konkurentnoto-si-predimstvo?fbclid=IwY2xjawOLwlhleHRuA2FlbQIxMQBicmlkETBnU29kdHFLaWUzTVdldHp1c3J0YwZhcHBfaWQQMjIyMDM5MTc4ODIwMDg5MgABHnoN4_eOwvdio6eQz1szX4-6aSBqWxHlVBlqQVc4EgeBRkWTf0MWF81xrU_e_aem_IIAz7hYOJNfLA5oGB4wI5A