30.06.2016

"We expect a budget surplus of around 3.5% of GDP for the first half of 2016, which is a very sound outcome guaranteeing the stabilisation of public finance. In this way, having managed to stabilise  the financial system and to put it in order, we report that Bulgaria performs relatively well as against the recent years, against the background of the geo-political and economic instability of the environment", said Minister of Finance Vladislav Goranov at an international round table ‘Business to the Rules' organised by BICA. He added that the budget would be far from the 2% deficit set in this year's Consolidated Fiscal Programme.

Minister Goranov summarised the results from the measures taken to address shadow economy which have resulted in this budget execution. The most important ones are related to the introduction of a reverse charge of VAT mechanism for supplies of cereals and industrial crops introduced since January 2014. The Minister announced that this measure was extended to 31 December 2018, with a positive effect of around BGN 200 million from it reported for the revenue side of the budget for 2015 and 2016. Likewise, the measure related to the control over the physical movement of goods of high fiscal risk was launched at the beginning of 2014. Fiscal control points across the country performed over 280,000 checks of transport vehicles in 2015, with 73,000 of the transport vehicles being equipped with technical control devices and the movement of 895,000 tons of different types of goods at risk being tracked. As a result, there is an increase of BGN 605 million, or by 16.5 %, in the tax base for intra-Community acquisitions of goods of high fiscal risk declared by Bulgarian legal and natural persons. The growth of all intra-Community acquisitions declared in 2015 totals 17.4 %. As to domestic transactions, there is an increase of BGN 7.326 billion, or by 4 %, in the tax base in 2015.

The Finance Minister underlined that our country had a relatively up-to-date financial structure allowing a further limitation of cash payments as a guarantee for a smaller degree of tax avoidance. He proposed the further enhancement of this measure.

As to the control over the supplies and the movement of liquid fuels, targeted efforts are made by both the NRA and the Customs Agency, Mr. Goranov assured. ‘At first hearing, the National Assembly passed yesterday an amendment to the VAT Law which introduces a mechanism guaranteeing the VAT due for trading in fuels. In addition to this measure, we also oblige the NRA authorities to advise the relevant competent authorities (the Ministry of the Interior, the State Agency for Metrological and Technical Surveillance, etc.) of taking actions to forfeit the containers subject to violation and the fuels contained therein', the Minister explained. 

Mr. Vladislav Goranov also announced some data about revenues from excisable goods. As to fuels, for the first 5 months of 2016 the Customs Agency reports a nominal growth of 8.2 % in the revenues from excise duties on fuels, with revenues reaching BGN 851.5 million, or a growth by BGN 64.4 million, compared to the same period of 2015. The volume of forfeited fuels also rises considerably, i.e. they are 282 tons in the January-May 2016 period, or around 200 tons more than the last year. With tobacco products, excise duty revenues until May amount to BGN 874.3 million, reporting a growth of 23 % as against last year. The growth of excisable cigarettes has reached 5.3 billion pieces, while they were 4.5 billion pieces in the same period of 2015, i.e. the number of cigarettes levied has increased by 18.7 %. ‘These data are also confirmed by the research of businesses. From 18.1% of illegal cigarettes at end-2014, this share dropped progressively during the entire 2015 to reach a record low level of 8.3 % at the end of the year, i.e. this is the lowest result recorded in the last 9 years and one of the lowest ones across the EU', the Finance Minister said. Excise duty revenues for alcohol and alcoholic beverages for the first 5 months of the year report a rise by 5.7 % as against last year, i.e. revenues reached BGN 105 million. By end-May 2016, over 41,000 litres of high-alcoholic beverages and spirit aimed for the production thereof. Minister Goranov mentioned that those figures would continue rising as ‘just in the last couple of days we have over 5,00 litres of illegal alcohol detected, which accounts for the quantities of several inspections at the seaside and is linked to the more active summer season'. Customs duty proceeds grow by 11.2 %, or by BGN 7.2 million, for the first 5 months of the year.

Minister Goranov assessed as good prospects the country's joining the international initiatives of the G-20 governments and of the Organisation for Economic Co-operation and Development aimed at combating tax avoidance and evasion, i.e the Global Forum on Transparency and Exchange of Information, the Convention on Administrative Assistance in Tax Matters, the Multilateral Agreement between the Competent Authorities on the Automatic Exchange of Financial Account Information and the framework for adoption of the measures of the BEPS plan. He announced that right after joining, we had started receiving data: for instance, the German minister of finance had sent a list of bank accounts of Bulgarian natural and legal persons which the German state had detected under the cooperation with the Swiss authorities, i.e. this is a topic which the Bulgarian revenue authorities were working on, the Minister of Finance said.

Minister Goranov reiterated to the business representatives participating in the round table that the Ministry of Finance was an administration open to any proposals that could enhance the state's capacity to collect its revenues and to create a climate for doing business that ought to be competitive.