SOFIA (Reuters) – Bulgaria expects to overshoot its 2006 tax revenue target by around 12.5 percent by the end of the year, due to improved collection, the national revenue agency said yesterday.

The agency had gathered 6.7 billion levs (–3.43 billion) in taxes and social payments through November 17, close to the year-end forecast of 6.9 billion levs.

“The last record for overshooting tax revenue targets was in 2000 when it was 9.8 percent,” said agency head Maria Murgina.

The agency, launched in January, has pledged to boost tax collection by 5-6 percentage points through 2009 and an extra 1 billion levs of revenue per year after that.

Successive governments in Bulgaria, which will join the EU on January 1, have racked up large surpluses since 2003, mainly by intentionally underestimating tax revenues. The practice has won praise from the IMF and economists eager to see economic stability. Critics say it cheats taxpayers by allowing the government to make huge non-discretionary payments without parliamentary approval.

This year, the three-party, Socialist-led coalition looks set to far overshoot its goal of a hefty budget surplus of 3.2 to 3.3 percent of gross domestic product (GDP). At the end of November, the surplus was 2.3 billion levs, or almost 5 percent of GDP.

In its 2007 draft budget, due to go to Parliament later this month, the government has officially committed to a surplus of 0.8 percent of GDP, although Finance Minister Plamen Oresharski said he would actually aim for 2 percent.