**Global evidence to date on the impact of the fiscal system on child poverty, including in Europe, is limited overall.** Child poverty is a complex issue that requires a multi-dimensional approach and coordination across policy domains (Jacquet et al., 2021). Avram & Militaru (2016) examined the antipoverty effect of child contingent policies in Romania and the Czech Republic, paying particular attention to their sensitivity to population characteristics and the tax-benefit system they are embedded in. Further evidence (Pezer, 2022) explored the effects on child poverty of generosity and family size considerations of the child transfers in Croatia, Greece, Germany, the Slovak Republic, Sweden, and the United Kingdom. This evidence contributes to understanding the fiscal system's effects on child poverty, identifying which transfers have higher marginal effects on child poverty reduction, and the degree to which some households benefit from fiscal policy. The findings for these countries validate that the most effective approach to reducing poverty and offsetting costs involves a blend of universal and targeted support, whether through family benefits or social assistance programs. Aziz et al. (2013) examine income distribution and fiscal effects by age and gender in New Zealand using a micro-simulation model. The study highlights lifecycle trends, gender differences, and varying fiscal impacts, revealing complexities in taxation patterns.

**Few studies have used fiscal incidence analysis (CEQ) to identify policies to alleviate child poverty.** Cuesta et al. (2021) integrated fiscal, poverty, and child well-being metrics for a child-centered fiscal incidence analysis with a proof of concept for Uganda (CEQ for children (CEQ4C) (Cuesta et al., 2021)). Results show that Uganda's budget for child-related expenses is limited and has a modest impact on reducing poverty and inequality. Social spending, subsidies, and taxes collectively decrease child poverty by around five percentage points. The primary impact stems from in-kind benefits in health and education, with cash transfers having a negligible effect on monetary poverty. Another CEQ4C study in Belarus (Bornukova et al., 2022) found that the fiscal system in Belarus effectively mitigates monetary poverty among children, primarily through child benefits. Without these direct transfers, child poverty would be twice as high, reaching 25.8%. Notably, child benefits for children aged 0-2 years are crucial in reducing child poverty by 5.7 percentage points. Moreover, child benefits for children aged 3-18 and associated preferences contribute significantly, reducing child poverty by 1.2 and 1.3 percentage points, respectively. The results show that the current child benefits system favors families with young children, leaving vulnerable groups such as those with multiple children, single-parent families, and older children with significant gaps in coverage. Social assistance for households with children needs improvement through targeted assistance and benefits for vulnerable groups. Fiscal policies in Kenya initially increase poverty among children, but education and healthcare services provide significant in-kind benefits for those in poverty. Social spending for children in poverty has mixed results: education spending tends to benefit poorer children, while secondary education spending primarily benefits wealthier children; health spending is not pro-poor, except for primary healthcare investments. Social assistance programs in Kenya are pro-poor but small (Fiala, 2021).

**The evidence on the role of the fiscal system in mitigating child poverty is scarce for Bulgaria.** UNICEF (2022) identified that larger families and lone parents have a higher risk of falling into Bulgaria's at-riskof-poverty category. Additional evidence for EU countries, including Bulgaria (Hallaert, J. et al., 2023), investigates the drivers of child poverty using regression analysis and the potential role of fiscal policy, labor policy, and public investments. The fiscal policy analysis focuses on the potential role of social spending on severe material deprivation for a set of countries using panel regressions. The tax side, or the entire fiscal system, is not analyzed. The main results show that to counteract the potential long-term

5