21.05.2021

"Today we lay a new beginning of the communication between the revenue administration and the Bulgarian citizens and businesses. We have started reviewing how public resources are being spent, inspecting how taxes are collected and how the Customs Agency operates". This is what the Minister of Finance Assen Vassilev announced today at a joint press conference with the Executive Director of the National Revenue Agency Roumen Spetsov and with the Director of the Customs Agency Pavel Tonev which was held at the Ministry of Finance.

Minister Vassilev announced that based on an analysis of the activity of the NRA, it was evident that the companies that had received public funds from public procurements and programme payments from the state had a quite high concentration of public funds. In 2020, the state had paid BGN 15.8 billion to private companies, with 7 companies having received BGN 3.4 billion. For the first four months of this year 3 companies had received a public resource of BGN 1.3 billion. "The NRA audits will begin namely from this concentration of public resource, with all subcontractors along the chain also being subject to inspection. We request a permission from all ministries, agencies and state-owned enterprises in order to be able to make the list of those companies available to the public", said the Finance Minister.

The Minister added that as for quite some time there had been some public interest in the writing off of liabilities with expired limitation by the NRA, those data could be accessible to the public in a special Transparent Management section on the website of the NRA. "Year on year the NRA writes off liabilities of BGN 2-3 billion. These are liabilities that the NRA does not manage to collect, with the amount of liabilities totalling BGN 10 billion in the 2017-2020 period", said the Finance Minister. At the same time a list of the debtors to the fisc had been published. Those were companies which currently owed huge amounts, above BGN 5,000, to the NRA. The due amount totalled BGN 9.9 billion, with the biggest debtor having liabilities of BGN 161.5 million. There were also debtors owing more than BGN 50 million. It could be difficult to collect some of these debts, with the first 100 companies from this list owing over BGN 2 billion, said Mr. Assen Vassilev.

The Minister also announced that the ex-post control unit had been removed from the Customs Agency in 2019, which meant that no thematic inspections or inspections of risky companies after the goods cross the border could be made. The new management was therefore working to restore that unit within the Agency's urgently by making changes to its Rule of Procedure. "There will also be a new requirement to all Customs Agency employees who will undergo a check of their income, property status and bank deposits. They will quit the bank secret and will allow access of the NRA to their companies, property and income in the country and abroad, thus enhancing the trust in the customs system".

The Finance Minister summarised that: "we see a picture that is quite worrying, a picture of systemic non-collection of tax proceeds, without any ex-post control over domestic companies, a picture that has allowed huge deficits in the system either by fraud or by avoidance".

Mr. Assen Vassilev also said that these issues started being resolved today because if the state didn't collect its proceeds, there would be no money for pensions, healthcare or education.

He also outlined the first measures that would be undertaken by the new management of the revenue administrations: "we launch an e-billing project, i.e. invoices not to be submitted 14 days after the end of the month but the exchange of invoices to take place in real time; the control of company VAT will be made as early as at the registration phase, i. e. when the company is registered, it will be monitored so as to avoid establishing companies for the purpose of VAT syphoning; there will be public control over the recipients of public procurement money through NRA audits of big beneficiaries; also there will be criteria in the public procurements which will be monitored when paying out the funds – we are working on this together with the Public Procurement Agency. There are other measures, too, which will be announced later on. The purpose is to improve the work of the revenue administrations and to change the practices, the procedures and the ways in which they have operated so far in order to avoid the leakage of BGN 2-3 billion per year".   

The Minister also summarised the budget execution by now by laying emphasis on the fact that revenues were executed according to the plans, there was a slight lagging behind of the excise duty revenues at the Customs Agency which were expected to catch up, the expenditure part was also executed as per the plans. As regards expenditures, the Minister said that "the bulk of the possibilities for budget restructuring so as to use those expenditures for purposes not included in the State Budget Law as adopted by the National Assembly were wasted in the first four months of the year, i.e. the 60/40 measure and the additional increase of pensions by BGN 50 in April and May were not secured through a revision of the expenditures but through a restructuring". The Finance Minister said that a reserve had been found and that the additional BGN 50 for pensioners, as already announced, would continue. As regards the measures for businesses, he announced that next week together with the Minister of Economy Kiril Petkov and with the Minister of Labour and Social Policy Galab Donev they would announce those measures and that they were also working proactively with the minister of tourism to find some options for relief and support measures for the companies in the sector of tourism.

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